O - Investments Glossary

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Glossary: O

Occupational Pension Scheme.A pension scheme established by an employer, usually on a group basis.

Occupational Pensions Advisory Service. A voluntary organisation offering free advice and help to members of the public, who are experiencing problems concerning their rights to benefits in pension schemes.

Occupational Pensions Board. Established to oversee contracting out, and to examine and report on issues of public interest related to pensions and connected subjects e.g. preservation of benefits.

Off The Page Advertisement. An advertisement which incorporates an application form to apply for an investment directly, based on the information contained within the advertisement.

Off the Shelf Company. A company which has already been registered but which has not started to trade, so is available for sale at nominal cost if someone wants a new company quickly. Offer and Acceptance. Two of the necessary stages in a viable contract.

Offer Price. The price at which a security is offered for sale. See Bid Price.

Offer to Bid. Compares the original purchase cost or offer price - usually of a unit trust - with its bid price, the price you receive if you sell.

Offer to Offer. Compares the original purchase cost or offer price - usually of a unit trust - with its current offer price.

Office of Fair Trading. Government body charged with ensuring a 'level playing field' for competition in all sectors of the economy.

Officer. Someone with an official position in an organisation.

Official Receiver. Person appointed by the DTI to act in bankruptcy matters and oversee the winding up, and possibly liquidation, of the debtor.

Offset. To balance one item with another.

Offshore. Basically, anywhere out of the country not within the authority of the Inland Revenue.

Offshore Bond. An investment bond issued by a company outside the UK and outside the authority of the Inland Revenue. Usually established in countries with little or no tax giving gross fund growth. Popular locations include Luxembourg, Republic of Ireland, Channel Islands and Isle of Man. Old Code. Pre-1970 Finance Act approval for occupational pension schemes. All pre-1970 schemes had to be re-approved under New Code by April 1980. Old Lady of Threadneedle Street. The Bank of England.

Ombudsman. An official who investigates complaints from the public against official bodies, large organisations or industry sector participants.

Oncosts. Costs of producing an item in addition to the direct costs.

Open Ended Investment Company. OEICS Collective investment in which investors receive shares, different classes can be issued e.g. UK equities. Single pricing for buying/selling shares, value of shares reflects net asset value of fund assets. Fund assets held by an independent depository.

Open Market Option. An option under pension schemes to take the cash in the pension fund and find the best annuity rate available from other companies in the market. There may be a charge for taking the money, or perhaps enhancement if staying.

Opening Years. Special tax rules and options apply to the opening three years of a business.

Operating Profit. The figure which remains after deducting all operating costs (except capital expenses) from sales revenue.

Opportunity Cost. In making a decision, the foregone potential of not following an alternative course of action. Optimum. Most suitable, best.

Opting Out. This is where a member opts out of an employer's pension scheme whilst remaining employed, or may refer to an employee who is eligible to join an employer's pension scheme, but decides not to join.

Option. An option gives a right - not an obligation - to buy or sell a given commodity, at a set price, within an agreed period. A call option gives the right to buy a security at an agreed price, called the strike price. A put option gives the right to sell before a give date. A traded option is one that can be bought and sold on the traded option market run by the Stock Exchange. A traditional option can be exercised on one day only. The premium is the price you pay to acquire the option.

Ordinary Residence. For the purposes of taxation an individual may be ordinarily resident in the UK although he or she is not physically resident in a particular tax year. The term "ordinary residence" is broadly equivalent to habitual residence. If an individual is resident in the UK year after year he or she is ordinarily resident here and liable for UK tax.

Ordinary Shares. The voting shares of a limited company.

Organic Growth. Growth based on expanding the existing trading base, rather than buying other businesses.

Overdraft. In banking terms, drawing out more money from an account than there are available funds.

Overfunding. It may be possible for the fund of an occupational scheme or a FSAVC to become so large that projected benefits exceed either scheme benefits or Revenue maxima. Remedies may include increasing benefits up to Revenue maxima, contribution holidays or refunds.

Overheads. Everyday costs of running a business.

Overtrading. Shortage of liquidity caused by not having enough working capital to support the level of sales and production. Taking on business which cannot be funded by cashflow.

Own Life. Refers to a policy taken out on one's own life for the benefit of one's estate or other specified beneficiaries.