Please click the terms to see the explanation.
Source: Deutsche Börse AG

Offering price

The offering price of an investment fund, for example, is typically calculated on a daily basis by the investment company on the basis of the fund's net asset value (NAT). Investors who purchase shares in the fund are often required to pay a fee ("load") in addition to the offering price.

Official Market (Amtlicher Markt)

On November 1, 2007, the Official Market was converted into the Regulated Market. The previous subdivision of the Official and Regulated Markets no longer exists. The admission and follow-up requirements for the Regulated Market are now those previously valid for the Official Market. Securities that were entered before November 1, 2007, are now listed only on the Regulated Market.

Offsetting transaction

In Germany, the banks have voluntarily entered into an agreement to use the exchange. These types of transactions are therefore only allowed when the customer expressly asks for them.

Omega (warrants)

The omega indicates the percentage change in the price of a warrant given a one-percent change in the price of the underlying instrument. Unlike leverage, which assumes that the absolute changes in price are the same for the warrant and the underlying instrument, the omega takes into account the delta and thus measures the actual leverage of the warrant.

Open Market (Freiverkehr)

Primarily foreign shares are traded in Open Market (Freiverkehr) at FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange). However, a number of German companies are listed here, too - beside bonds of German and foreign issuers, certificates and warrants. The segment was created on 1 May 1987. The Regulated Unofficial Market is not an organized segment in the sense of article 2, paragraph 5 of the German Securities Trading Act. The Frankfurt Stock Exchange's Directives for the Regulated Unofficial Market are the basis on which the inclusion of a share is determined. There are only few admission criteria and no follow-up requirements for issuer.

The basic criteria are as follows:

Application for admission must contain a clear description of the share to be included as well as state on which national or international market prices have already been established. For shares, which are not traded on any other market, the applicant must provide detailed information in the form of an exposé which then enables an appropriate evaluation.

The issuer's application must be submitted in written form by a company already admitted to trading at the Frankfurt Stock Exchange.

The applicant must immediately and in written form notify the Frankfurt Stock Exchange about circumstances concerning the respective share and/or issuer.

The Frankfurt Stock Exchange, as the operator of the Regulated Unofficial Market, makes all decisions as regards inclusion of a share.

 Publication language: German or English.

Since October 2005 Freiverkehr is also refered to as Open Market.

Synonym: Freiverkehr

Open outcry

Form of communication between dealers and brokers in floor trading in which securities prices and trading volume are indicated via hand signals or by shouting.

Opening price

In floor trading, the first variable price serves as the opening price. It is determined by an exchange broker, usually shortly after the trading session has begun, on the basis of all orders received hitherto and in keeping with the principle of highest volume transacted. In the electronic trading system Xetra®, designated sponsors ensure liquidity in the securities assigned to them, which means that opening prices can nearly always be determined in the opening auction prior to the commencement of trading. As with floor trading, the price determination procedure is based on the principle of highest volume transacted. If the opening auction does not generate any turnover in a stock, and thus does not yield a price for that stock, the first variable price serves as the opening price.

Opération blanche

The concept underlying the opération-blanche method is that once an investor commits a fixed amount of money to a stock portfolio, it will grow on its own - i.e. without the need for additional funds. New shares are purchased with dividend payments or through the sale of subscription rights. For example, in the case of a capital increase, the investor sells enough subscription rights to enable him to acquire the new shares without having to contribute more of his own funds. Consequently, the number of shares in the portfolio increases, although the amount invested did not change.

Operational profit

The operational profit summarizes the profits generated by the various business areas of a company, for instance through sales of self-manufactured products. The operational profit does not include profits generated by subsidiaries or holdings nor earnings from financial investments.


Options are financial instruments in their own right. They belong to the class of instruments known as derivatives, which are traded either over-the-counter or as standardized contracts on an options and futures exchange. The buyer of an option pays the option writer a price (premium) for the right to exercise the option. In return, the option writer is obliged to deliver or accept the underlying instrument in exchange for payment of the agreed-upon price when the option is exercised. If the option owner does not exercise the option, it expires at the end of a specified period. Because the decision to exercise an option rests solely with the buyer, this class of derivative is also called a contingent forward deal.

Purchasing options enables investors to take advantage of expected upward trends in the cash market or hedge against risks. The two classic option contracts are the long call (purchase of a call) and the long put (purchase of a put):

 Long call:  

An investor expects stock A to go up. By purchasing a call, he acquires the right to buy this stock in six months' time at a price of euro 100 (the exercise price). He pays an option premium of euro 5 per share. If, at the end of the six-month period, the price of the stock has increased to, say, euro 108 (in which case the option is said to be "in the money"), the investor will exercise his option; in other words, he will buy the shares from the option writer for euro 100 and then sell them immediately on the market for euro 108. In this example, his profit -- the price of the share less the exercise price and the premium -- would be euro 3. If the stock price had been euro 105, the option would have been at the break-even point, and the investor would have neither earned a profit nor incurred a loss. If the market price of the stock is at the exercise price ("at the money") or below it ("out of the money") at the time of expiration, the investor will normally let the option expire, because he would lose money by exercising it.

 Long put:  

The purchase of a long put often serves as a strategy for hedging against losses. For example, an investor owns stock B, whose current price is euro 45. Because he expects prices to fall, he wishes to protect himself against a possible loss. He buys a put with an exercise price of euro 48 and pays the option writer a premium of euro 3. If the price of the stock has dropped to euro 40 at the time of expiration, the investor will exercise his option. He sells his shares and receives euro 48 per share. After deducting the option premium of euro 3, he retains euro 45, thus preserving the value of the stock.

Option premium

The option premium reflects the intrinsic value and the time value of the option. Option pricing models such as the Black-Scholes model are typically used to calculate a fair option premium. The option premium is also referred to as premium income.

Option premium

The option premium reflects the intrinsic value and the time value of the option. Option pricing models such as the Black-Scholes model are typically used to calculate a fair option premium. The option premium is also referred to as premium income.  

Option writer

In return for a premium, the option writer promises to deliver either the underlying security or the appropriate cash amount if the option is exercised. There are two kinds of option writers:

A put writer must buy the underlying security at the agreed-upon price if the option holder exercises the option before it expires. A call writer must deliver the underlying security at the agreed-upon price if the option holder exercises the option before it expires.


A complete order contains information on the investor, the security, the order volume, the type of order and price, the time limit and the exchange on which the order is to be executed. The investor places the order with a bank, a financial services provider, or an institution admitted to exchange trading.

There are two kinds of orders, limit orders and market orders. A limit order to buy must be executed at or below the limit price; a limit order to sell must be executed at or above the limit price. Market orders are to be executed at the best available price. In general, it is recommended that investors place limits on all orders (except for stocks contained in the DAX® index) to protect their assets from excessive price fluctuations.

A further type of order is the so-called stop order, which is executed as a market order when a stock price reaches a specified threshold. For example, an investor can limit losses during a price slide by placing a stop-loss order, which means that a stock is to be sold as soon as the price has fallen to a certain level. Conversely, a buy stop order is not to be executed until the price has risen to the designated level. The advantage of stop orders is that investors do not need to constantly monitor the price of their stocks.

Order book

An order book is used to pool, compare and match the volumes and prices of buy and sell orders for a particular security. Thus, in auction-based trading, the order book supports the price determination procedure.

Market orders, which are to be executed at the best available price, are given first priority in the order book. The remaining orders are sorted and listed, with the bid prices in ascending order and the ask prices in descending order.

Nowadays, most order books are computer-based. Some order books are closed, which means that only certain groups of persons have access to them, while others, such as the electronic order book of the Xetra® trading system, are open to all trading participants.

Order book statistics

The order book statistics of FWB® Frankfurter Wertpapierbörse (the Frankfurt Stock Exchange) comprise all transactions in the Xetra® and Xontro (trading floor transactions) order books. In the statistics all volumes are single counted.

Order routing

Banks typically forward buy and sell orders electronically. In Germany, orders can be routed to the trading floor via Xontro, or to the Xetra trading system via an order routing interface.

Ordinary share

Most shares traded on the German stock exchanges are ordinary shares. The shareholder rights vested in ordinary shares include in particular

the right to a dividend payment the right to vote at the annual general meeting subscription rights for new shares the right to demand information during the annual general meeting the right to a share of liquidation proceeds

On the German exchanges, the abbreviation for ordinary shares is "Stämme" (for "Stammaktien"). Antonym: preferred

OTC (over-the-counter) trading

Nearly all securities, currencies or precious metals can be traded over-the-counter by banks, investors and Exchange Broker. OTC prices are quoted in separate price lists. OTC trading is governed by the regulations pertaining to securities transactions; however, it is not subject to statutory supervisory or monitoring regulations. Generally accepted exchange customs serve as a guideline for OTC trading. Synonyms:   Off-floor trading

Other types of certificates

Index certificates These track the development of an underlying index 1:1 – both for rising and falling prices.

Reverse index certificates In contrast investors bet explicitly on falling share prices when they invest in this kind of certificates, also known as short or bear certificates. If the underlying index contracts, the certificate gains in value.

Out of the money (warrants)

A call warrant is "out of the money" when its exercise price is higher than the current market price of the underlying instrument. A put warrant is out of the money when its exercise price is lower than the current market price of the underlying instrument. A warrant that is out of the money has an intrinsic value of zero.

Outperformance certificate

Outperformance certificates offer investors disproportional gain compared to a direct investment in a share, commodity or index. Classic outperformance certificates have a strike price and a participation rate. Both features are determined at the certificate’s issue. As soon as the defined price level is reached, the price of the certificate responds to the price development of the underlying with a participation rate of more than 100 percent. In return, investors are not paid a potential dividend. It is paid to the issuer of the certificate instead. The higher participation rate also applies in case of losses. Below the strike price, investors face no higher risk than with a direct investment. At the end of maturity, the investor is paid at least the price of the underlying for each certificate.

Sub-types are protect outperformance and spread certificates, which feature additional safety levels. Typical names used by issuers are: express, sprint, spread, sidestep, double chance and touchdown (certificate).


Market participants speak of overweighting when buying or selling a particular type of investment (e.g. shares, bonds and warrants), a region or sector, ultimately changing the weighting of their depot. This weighting is usually stated in percent. The additional purchase of securities lends the respective type a stronger weight in the portfolio.

Analysts often use these terms to express their recommendations to either buy (overweight) or sell (underweight) shares.