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Operating Income Before Depreciation and Amortization (OIBDA) What is OIBDA? OIBDA measures a company’s profitability from its core operations before accounting for depreciation and amortization. It strips out the non-cash charges related to spreading asset costs over time and—when applicable—interest and tax expenses that may be included in operating income. Because it focuses on operating…

Operating Income Operating income is the profit a company generates from its core business operations after deducting operating expenses (but before interest and taxes). It measures how effectively management turns revenue into profit from normal business activities. Key takeaways Operating income = revenue minus cost of goods sold (COGS) and operating expenses (selling, general, and…

Operating Expense Ratio (OER) Definition The operating expense ratio (OER) measures how much it costs to operate a real estate property relative to the income it generates. It helps investors evaluate operational efficiency and compare similar properties. Formula Commonly used formula: OER = (Operating Expenses − Depreciation) / Gross Operating Income Explore More Resources ›…

Operating Expenses (OpEx): Definition, Examples, and Management What is an operating expense? An operating expense (OpEx) is a cost a business incurs through its normal, day-to-day operations to generate revenue. OpEx is distinct from capital expenditures (CapEx), which fund the acquisition or improvement of long‑lived assets, and from non‑operating expenses, which are unrelated to core…

Operating Earnings Definition Operating earnings (also called operating income, operating profit, or EBIT) measure the profit generated by a company’s core business operations. They are calculated by subtracting operating expenses—such as cost of goods sold (COGS), selling and marketing, general and administrative (G&A), research and development, depreciation, and other operating costs—from revenue. Operating earnings exclude…

Operating Costs: Definition, Formula, Types, and Examples Operating costs are the ongoing, day-to-day expenses required to run a business. They include the direct costs of producing goods or services and the indirect costs of operating the company, but exclude non-operating expenses such as interest, financing costs, or one-time gains and losses. Key points Operating cost…

Operating Cash Flow Ratio The operating cash flow (OCF) ratio measures a company’s ability to cover short-term liabilities using cash generated from its core operations. It focuses on actual cash inflows from operating activities rather than accounting profits, offering a clearer view of short-term liquidity. Formula OCF ratio = Operating cash flow / Current liabilities…

Operating Cash Flow Margin Operating cash flow margin measures the proportion of a company’s sales that is converted into cash from operating activities during a period. It’s a cash-based profitability metric that highlights earnings quality and operational efficiency. Key takeaways Shows how effectively sales are converted into operating cash. Calculated as operating cash flow divided…

Operating Cash Flow Demand (OCFD) What OCFD Means Operating Cash Flow Demand (OCFD) is the amount of cash a company’s ongoing operations require to sustain current activity — paying suppliers and employees, funding inventory and receivables, covering taxes and interest, and meeting other day‑to‑day obligations. It’s a practical measure of how much cash a business…

Operating Cash Flow (OCF) What is OCF? Operating cash flow (OCF) is the cash a company generates from its core business operations—producing and selling goods or services—over a reporting period. It excludes cash flows from investing (e.g., buying equipment) and financing (e.g., issuing debt or equity). OCF shows whether a company can fund day-to-day operations…

Operating Activities Operating activities are the core functions a business performs to produce and sell goods or provide services. They generate the majority of a company’s recurring cash flow and determine whether the business is profitable in its normal course of operations. What counts as operating activities Typical operating activities include: * Cash receipts from…

Opening Range The opening range (OR) is the high and low price of a security during a short period immediately after the market opens—commonly the first 5, 15, 25, or 30 minutes. Traders monitor this range because it often contains high volume and volatility and can set the tone for the rest of the trading…

Opening Price The opening price is the first traded price of a security when an exchange begins regular trading for the day. It reflects overnight information and premarket activity and often sets the tone for the trading session, providing insight into market sentiment and potential price direction. Key takeaways The opening price is determined by…

Opening Imbalance Only Order (OIO) An Opening Imbalance Only order (OIO) is a limit order type used on the Nasdaq that provides hidden liquidity specifically for the opening cross. It is designed to participate only in the auction that determines the opening price and is not displayed in the continuous market. How it works Executable…

Opening Cross: How Nasdaq Determines the Opening Price The Opening Cross is Nasdaq’s auction process for determining a fair and orderly opening price for each listed security. By aggregating buy and sell interest before the market opens, the Opening Cross aims to match orders, reveal imbalances, and set a single opening price that reflects supply…

Opening Bell: Meaning, History, and How It Affects Trading Key takeaways * The opening bell marks the start of a regular trading session (NYSE and Nasdaq open at 9:30 a.m. ET, close at 4:00 p.m. ET). * The bell is largely ceremonial today but draws media attention and highlights IPOs or special guests. * Pre-market…

Open Trade Equity (OTE) What is OTE? Open Trade Equity (OTE) is the unrealized gain or loss on open positions — the difference between the current market value and the price at which the position was opened. It represents paper gains or losses that will only become realized when the position is closed. OTE is…

Open Source: What It Means and How It Works Key takeaways * Open source software (OSS) is software whose source code is publicly available for anyone to view, modify, and redistribute. * Open source projects rely on community collaboration, permissive licensing, or copyleft rules to govern reuse and distribution. * Well-known open source examples include…

Open Position: Meaning and Risk in Trading What is an open position? An open position is any trade that has been executed but not yet closed by an opposing transaction. Examples: * Buying and holding 300 shares creates a long open position until those shares are sold. * Entering a short position creates an open…

Open Outcry — Definition Open outcry is a traditional method of trading in which traders communicate buy and sell orders face-to-face using vocal shouts and standardized hand signals within physical trading pits. It was once the primary way orders were executed on many stock, futures, and options exchanges but has largely been replaced by electronic…

Open Order: Definition, How They Work, and Risks Key takeaways An open order is an unfilled, working order that remains active until its specified condition is met, it is cancelled, or it expires. Open orders are typically conditional (limit or stop orders) and therefore may not execute immediately. Market orders are usually filled instantly and…

Open Offer — Definition and Overview An open offer is a type of secondary-market share offering in which a company gives its existing shareholders the opportunity to buy additional shares directly from the company at a price typically below the prevailing market price. The offer is made in proportion to each shareholder’s existing holdings so…

Open Mouth Operations (Moral Suasion) Open mouth operations—also called moral suasion or “jawboning”—are the use of public or private rhetorical pressure by authorities (typically central banks) to influence behavior and expectations without direct intervention or coercion. Instead of changing policy instruments like interest rates or balance sheets, officials seek to shape market and public sentiment…

Open-Market Transactions: Meaning, Process, and Why They Matter What is an open-market transaction? An open-market transaction is when a company insider buys or sells the company’s stock on the public market at or near the prevailing market price. When done properly—after required filings with the Securities and Exchange Commission (SEC)—these trades are legal and compliant…

Open-Market Rate The open-market rate is the interest rate paid on debt securities that trade in the open market. It applies to instruments such as government bonds, corporate bonds, certificates of deposit (CDs), municipal bonds, commercial paper, banker’s acceptances, and preferred stock. These rates reflect current supply and demand among investors rather than a rate…

Open Market Operations Open market operations (OMOs) are the central bank’s primary tool for adjusting the supply of reserves in the banking system. In the United States, the Federal Reserve buys and sells government securities in the open market to influence the federal funds rate and, through it, other interest rates and overall economic activity….

Open Market: Definition and How It Works What is an open market? An open market is an economic system with minimal regulatory barriers to participation and trade. Prices in an open market are determined mainly by supply and demand rather than by government intervention, tariffs, quotas, licensing restrictions, subsidies, or prohibitions that favor certain producers….

Open Loop Card: What It Is and How It Works An open loop card is a general-purpose payment card that can be used anywhere that accepts its payment network. These cards typically display a major network logo—Visa, Mastercard, American Express, or Discover—and may also show the issuing bank or credit union. Open loop cards include…

Open Listing An open listing is a nonexclusive agreement that allows multiple real estate agents to show and market a property. Agents compete to bring a buyer, and only the agent who procures the buyer and closes the sale earns a commission. If the homeowner finds a buyer independently, no commission is owed under an…

Audit: Meaning, Importance, Types, Process, and Outcomes An audit is a systematic, independent examination of an organization’s financial records and controls performed by qualified professionals to determine whether financial statements fairly present the company’s financial position and comply with applicable rules. Audits build trust for investors, creditors, regulators and other stakeholders by providing reasonable assurance…

Open Interest Key takeaways Open interest is the total number of outstanding derivative contracts (futures or options) that have not been settled, exercised, or closed. It measures how many active positions exist in a contract, not the number of transactions. Increasing open interest generally indicates new money entering a market; decreasing open interest indicates money…

Open House: What It Is, How It Works, and Practical Tips What is an open house? An open house is a scheduled period when a home for sale is available for public viewing without a private appointment. Sellers or their agents typically prepare the property, step away during the event, and allow prospective buyers to…

Open-Ended Investment Company (OEIC) Key takeaways * OEICs are UK-domiciled, open-ended collective investment vehicles that create or cancel shares to meet investor demand. * They offer diversified portfolios managed by professionals and are priced at net asset value (NAV). * OEICs are regulated by the Financial Conduct Authority (FCA) and can be held in ISAs…

Open‑End Mortgage Key takeaways * An open‑end mortgage lets a borrower increase the outstanding mortgage principal later, up to a set limit. * Borrowers can draw only part of the approved amount and pay interest only on the outstanding balance. * Draws are typically secured by the same property and may be available only for…

Open‑End Management Company An open‑end management company is an investment firm that creates, manages, and administers open‑end investment funds — primarily open‑end mutual funds and many exchange‑traded funds (ETFs). These companies pool investor capital, manage the pooled assets according to each fund’s objective, and handle share issuance and redemption. Key takeaways Open‑end management companies run…