Offshore (OS)

Similar financial terms

Offshore finance subsidiary
A wholly owned affiliate incorporated overseas, usually in a tax haven country, whose function is to issue securities abroad for use in either the parent's domestic or its foreign business.

Agency costs
The cost of resolving the agency problem. These might include stock options and bonus schemes to managers.

Hostile takeover
A tender offer which is made to the shareholders without the approval of the board of directors.

AMEX Composite
The American Stock Exchange introduced a new AMEX Composite Index with a new ticker symbol, XAX, on 2 January 1997. The XAX is a market capitalization-weighted, price appreciation index, and replaced the AMEX Market Value Index (XAM) which, since its inception, has been calculated on a "total return basis" to include the reinvestment of dividends paid by AMEX companies. The new AMEX Composite Index is more comparable with other major indexes, which reflect only the price appreciation of their re ...

Transactions costs
The transactions costs are the expenses to the execution of a trade. It includes the commissions plus the difference between the price obtained and the midpoint of the bid-offer spread.

Storage costs
The cost of storing commodity.

Exposure
The maximum loss suffered from a default by a counterparty.

SOS
Somali Shilling from Somalia.

Cross default
Default on a loan agreement, which results in the default of the entire loan portfolio.

Golden cross
In technical analysis, what happens when the short moving average price of a stock (say, its 20-day moving average) cuts above a longer moving average (say, its 50-day average).

For chartists, this cross is a sign that the market mood has turned decidedly in favour of the stock, especially if up to that point two moving averages have been moving roughly in parallel.

Dead cross
In technical analysis, what happens when the short moving average price of a stock (say, its 20-day moving average) falls below a longer moving average (say, its 50-day average).

For chartists, this cross is a sign that sentiment in the market has turned against the stock, especially if up to that point two moving averages have been moving roughly in parallel.

Oslo Stock Exchange
In the early 1800s, Norway was a country of farmers and fishermen. Christiania, as the capital city was then called, had just 10,000 citizens. The Norwegian economy was weak, and money was scarce. This had a crushing effect on business and industry, and it was decided that the country needed a commercial exchange to encourage greater commercial activity.

The merchant Nicolay Andresen is generally recognised as the "father" of the Oslo stock exchange. He made the first proposal for a com ...

Market Close
The term market close refers to the time of day that a market closes. In the 24h foreign exchange market, there is no official market close. 5:00 PM EST is often referred to and understood as the market close because value dates for spot transactions change to the next new value date at that time.

Cost of sales
The costs associated with generating reported sales, including merchandise, direct labor, and other costs attributed to current sales activity.

Overnight position
Trader's long or short position in a currency at the end of a trading day.

Direct costs
Costs related directly to sales.

Dollar cost averaging
A system of investing in which an unchanging dollar amount is invested at regular intervals, regardless of share price.

Full disclosure
The principle of providing to investors all information required to make informed buying decisions, normally applied to new listings and specifically to information included in the prospectus.

Gross margin
The percentage of gross profit (sales minus direct costs) to sales, which should remain fairly consistent when sales rise or fall.

Gross profit
The profit remaning after direct costs are subtracted from sales, but before any expenses are deducted.

Accelerated cost recovery system (ACRS)
Schedule of depreciation rates allowed for tax purposes.

Accounting exposure
The change in the value of a firm's foreign currency denominated accounts due to a change in exchange rates.

Agency cost view
The argument that specifies that the various agency costs create a complex environment in which total agency costs are at a minimum with some, but less than 100%, debt financing.

All-in cost
Total costs, explicit and implicit.

American Depositary Receipts (ADRs)
Certificates issued by a U.S. depositary bank, representing foreign shares held by the bank, usually by a branch or correspondent in the country of issue. One ADR may represent a portion of a foreign share, one share or a bundle of shares of a foreign corporation. If the ADR's are "sponsored," the corporation provides financial information and other assistance to the bank and may subsidize the administration of the ADRs. "Unsponsored" ADRs do not receive such assistance. ADRs carry the same ...

Weighted average cost of capital
The weighted average cost of capital (WACC) is the expected return on a portfolio of all the firm's securities when debt, equity and tax shields are taken into account. Used as a hurdle rate for capital investment.

Nostro accounts
As there is no dollar cleraing and settlement system outside the USA, all eurodoolar transactions must take place through banks in New York using their clearing house system. Therefore all banks operating outside the USA and dealing in eurodollars must hold demand deposit accounts with US-based banks in New York through which receipts and payments can be effected.

These accounts, known as Nostro accounts, are also used to settle banks' foreign exchange transactions and to enable them to ...

Eurodollar demand deposit
Eurodollar demand deposit accounts are not often used or available, as the balances of such accounts would be volatile and the transaction costs incurred in such a service would reduce the overall efficiency and competitiveness of the eurodollar market. It is the latter factor that stimulates interest-rate-conscious corporate treasures and investment agencies to make eurodollar time deposits with banks in offshore centres.

Variable cost
A cost that is directly proportional to the volume of output produced. When production is zero, the variable cost is equal to zero. A variable is a cost of producing the product which a company sells. It would include such items as materials and labor that go directly into producing the shipped item. Another term for this is direct cost. These costs are usually shown directly under revenues on an income statement as the first costs associated with producing the revenues that are recorded.

True interest cost
For a security such as commercial paper that is sold on a discount basis, the coupon rate required to provide an identical return assuming a coupon-bearing instrument of like maturity that pays interest in arrears.

Translation exposure
Risk of adverse effects on a firm's financial statements that may arise from changes in exchange rates.

Transaction exposure
Risk to a firm with known future cash flows in a foreign currency that arises from possible changes in the exchange rate.

Trading posts
The posts on the floor of a stock exchange where the specialists stand and securities are traded.

Trading costs
Costs of buying and selling marketable securities and borrowing. Trading costs include commissions, slippage, and the bid/ask spread. See: transaction costs.

Time deposit
Interest-bearing deposit at a savings institution that has a specific maturity.

Take a position
To buy or sell short; that is, to have some amount that is owned or owed on an asset or derivative security.

Sunk costs
Costs that have been incurred and cannot be reversed.

Stop-loss order
An order to sell a stock when the price falls to a specified level.

Simple prospect
An investment opportunity where a certain initial wealth is placed at risk and only two outcomes are possible.

Short-term solvency ratios
Ratios used to judge the adequacy of liquid assets for meeting short-term obligations as they come due, including (a) the current ratio, (b) the acid-test ratio, (c) the inventory turnover ratio, and (d) the accounts receivable turnover ratio.

Shortage cost
Costs that fall with increases in the level of investment in current assets.

Short position
Occurs when a person sells stocks he or she does not yet own. Shares must be borrowed, before the sale, to make "good delivery" to the buyer. Eventually, the shares must be bought to close out the transaction. This technique is used when an investor believes the stock price will go down.

Security deposit (initial)
Synonymous with the term margin. A cash amount of funds that must be deposited with the broker for each contract as a guarantee of fulfillment of the futures contract. It is not considered as part payment or purchase.

Search costs
Costs associated with locating a counterparty to a trade, including explicit costs (such as advertising) and implicit costs (such as the value of time).

Savings deposits
Accounts that pay interest, typically at below-market interest rates, that do not have a specific maturity, and that usually can be withdrawn upon demand.

Round-trip transactions costs
Costs of completing a transaction, including commissions, market impact costs, and taxes.

Residual losses
Lost wealth of the shareholders due to divergent behavior of the managers.

Reserve ratios
Specified percentages of deposits, established by the Federal Reserve Board, that banks must keep in a non-interest-bearing account at one of the twelve Federal Reserve Banks.

Replacement cost
Cost to replace a firm's assets.

Rate of return ratios
Ratios that are designed to measure the profitability of the firm in relation to various measures of the funds invested in the firm.

Quantos
Currency options with a guaranteed exchange rate that enable buyers who like the asset, German bonds for example, but not the asset's pricing currency, to arrange to be paid in a different currency for a fee.

Prospectus
Formal written document to sell securities that describes the plan for a proposed business enterprise, or the facts concerning an existing one, that an investor needs to make an informed decision. Prospectuses are used by mutual funds to describe the fund objectives, risks and other essential information.

Profitability ratios
Ratios that focus on the profitability of the firm. Profit margins measure performance with relation to sales. Rate of return ratios measure performance relative to some measure of size of the investment.

Preliminary prospectus
A preliminary version of a prospectus.

Posttrade benchmarks
Prices after the decision to trade.

Postponement option
The option of postponing a project without eliminating the possibility of undertaking it.

Post-audit
A set of procedures for evaluating a capital budgeting decision after the fact.

Post
Particular place on the floor of an exchange where transactions in stocks listed on the exchange occur.

Possessions corporation
A type of corporation permitted under the U.S. tax code whereby a branch operation in a U.S. possessions can obtain tax benefits as though it were operating as a foreign subsidiary.

Positive covenant (of a bond)
A bond covenant that specifies certain actions the firm must take. Also called an affirmative covenant.

Positive convexity
A property of option-free bonds whereby the price appreciation for a large upward change in interest rates will be greater (in absolute terms) than the price depreciation for the same downward change in interest rates.

Position diagram
Diagram showing the possible payoffs from a derivative investment.

Position
A market commitment; the number of contracts bought or sold for which no offsetting transaction has been entered into. The buyer of a commodity is said to have a long position and the seller of a commodity is said to have a short position .

Paper gain (loss)
Unrealized capital gain (loss) on securities held in portfolio, based on a comparison of current market price to original cost.

Opportunity costs
The difference in the performance of an actual investment and a desired investment adjusted for fixed costs and execution costs. The performance differential is a consequence of not being able to implement all desired trades. Most valuable alternative that is given up.

Opportunity cost of capital
Expected return that is foregone by investing in a project rather than in comparable financial securities.

Operating exposure
Degree to which exchange rate changes, in combination with price changes, will alter a company's future operating cash flows.

Open position
A net long or short position whose value will change with a change in prices.

Net operating losses
Losses that a firm can take advantage of to reduce taxes.

Net financing cost
Also called the cost of carry or, simply, carry, the difference between the cost of financing the purchase of an asset and the asset's cash yield. Positive carry means that the yield earned is greater than the financing cost; negative carry means that the financing cost exceeds the yield earned.

Negotiated certificate of deposit
A large-denomination CD, generally $1MM or more, that can be sold but cannot be cashed in before maturity.

Most distant futures contract
When several futures contracts are considered, the contract settling last.

Modigliani and Miller Proposition II
A proposition by Modigliani and Miller which states that the cost of equity is a linear function of the firm's debt/equity-ratio.

Modigliani and Miller Proposition I
A proposition by Modigliani and Miller which states that a firm cannot change the total value of its outstanding securities by changing its capital structure proportions. Also called the irrelevance proposition.

MBS Depository
A book-entry depository for GNMA securities. The depository was initially operated by MBSCC and is currently in the process of becoming a separately incorporated, participant-owned, limitedpurpose trust company organized under the State of New York Banking Law.

Markowitz efficient set of portfolios
The collection of all efficient portfolios, graphically referred to as the Markowitz efficient frontier.

Market value ratios
Ratios that relate the market price of the firm's common stock to selected financial statement items.

Market timing costs
Costs that arise from price movement of the stock during the time of the transaction which is attributed to other activity in the stock.

Market impact costs
Also called price impact costs, the result of a bid/ask spread and a dealer's price concession.

Management/closely held shares
Percentage of shares held by persons closely related to a company, as defined by the Securities and exchange commission. Part of these percentages often is included in Institutional Holdings -- making the combined total of these percentages over 100. There is overlap as institutions sometimes acquire enough stock to be considered by the SEC to be closely allied to the company.

Long position
An options position where a person has executed one or more option trades where the net result is that they are an "owner" or holder of options (i. e. the number of contracts bought exceeds the number of contracts sold). Occurs when an individual owns securities. An owner of 1,000 shares of stock is said to be "Long the stock."

Liquidity ratios
Ratios that measure a firm's ability to meet its short-term financial obligations on time.

Limitation on asset dispositions
A bond covenant that restricts in some way a firm's ability to sell major assets.

Leverage ratios
Measures of the relative contribution of stockholders and creditors, and of the firm's ability to pay financing charges. Value of firm's debt to the total value of the firm.

Kangaroos
Australian equity.

Kurtosis
A statistical measure used to describe the distribution of observed data around the mean.

Whose ox gets gored
...who will be harmed by this plan

Bankruptcy cost view
The argument that expected indirect and direct bankruptcy costs offset the other benefits from leverage so that the optimal amount of leverage is less than 100% debt finaning.

Base probability of loss
The probability of not achieving a portfolio expected return.

Buy on close
To buy at the end of the trading session at a price within the closing range.

Capital loss
The difference between the net cost of a security and the net sale price, if that security is sold at a loss.

Capitalization ratios
Also called financial leverage ratios, these ratios compare debt to total capitalization and thus reflect the extent to which a corporation is trading on its equity. Capitalization ratios can be interpreted only in the context of the stability of industry and company earnings and cash flow.

Carring costs
Costs that increase with increases in the level of investment in current assets.

Certificate of deposit (CD)
Also called a time deposit, this is a certificate issued by a bank or thrift that indicates a specified sum of money has been deposited. A CD bears a maturity date and a specified interest rate, and can be issued in any denomination. The duration can be up to five years.

Changes in Financial Position
Sources of funds internally provided from operations that alter a company's cash flow position: depreciation, deferred taxes, other sources, and capital expenditures.

Clear a position
To eliminate a long or short position, leaving no ownership or obligation.

Close, the
The period at the end of the trading session. Sometimes used to refer to closing price.

Closed-end fund
An investment company that sells shares like any other corporation and usually does not redeem its shares. A publicly traded fund sold on stock exchanges or over the counter that may trade above or below its net asset value.

Closed-end mortgage
Mortgage against which no additional debt may be issued.

Closing purchase
A transaction in which the purchaser's intention is to reduce or eliminate a short position in a stock, or in a given series of options.

Closing range
Also known as the range. The high and low prices, or bids and offers, recorded during the period designated as the official close.

Closing sale
A transaction in which the seller's intention is to reduce or eliminate a long position in a stock, or a given series of options.

Common stock ratios
Ratios that are designed to measure the relative claims of stockholders to earnings (cash flow per share), and equity (book value per share) of a firm.

Composition
Voluntary arrangement to restructure a firm's debt, under which payment is reduced.

Cost company arrangement
Arrangement whereby the shareholders of a project receive output free of charge but agree to pay all operating and financing charges of the project.

Cost of capital
The required return for a capital budgeting project.

Cost of funds
Interest rate associated with borrowing money.

Cost of lease financing
A lease's internal rate of return.

Cost of limited partner capital
The discount rate that equates the after-tax inflows with outflows for capital raised from limited partners.

Cost-benefit ratio
The net present value of an investment divided by the investment's initial cost. Also called the profitability index.

Coverage ratios
Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed charge coverage ratio.

Cross hedging
The practice of hedging with a futures contract that is different from the underlying being hedged.

Cross holdings
One corporation holds shares in another firm.

Cross rates
The exchange rate between two currencies expressed as the ratio of two foreign exchange rates that are both expressed in terms of a third currency.

Cross-border risk
Refers to the volatility of returns on international investments caused by events associated with a particular country as opposed to events associated solely with a particular economic or financial agent.

Cross-sectional approach
A statistical methodology applied to a set of firms at a particular point in time.

Crossover rate
The return at which two alternative projects have the same net present value.

Customary payout ratios
A range of payout ratios that is typical based on an analysis of comparable firms.

Avoided cost
In context of project financing, the capital and expense that would have to be spent if the project did not proceed.

Replacement cost
What it would cost today to replace a company’s existing assets.

Foreclosure
The legal process by which a borrower in default under a mortgage is deprived of his or her interest in the mortgaged property. This usually involves a forced sale of the property at public auction with the proceeds of the sale being applied to the mrotgage debt.

Earnest money deposit
A deposit made by the potential home buyer to show that he or she is serious about buying the house.

Effective gross income
Normal annual income including overtime that is regular or guaranteed. The income may be from more than one source. Salary is generally the principal source, but other income may qualify if it is significant and stable.

Fixed costs
Production expenses that are independent of the level of output. Fixed costs could include debt repayments, security costs and marketing and administration costs.

Zero Cost Collar
Is a transaction which has little or zero cash outlay or cost for the initiating person. Often, a security is held and some protection is sought via a hedging transaction. One example, would be the purchase of an out-of-the-money put (debit) and the sale of an out-of-the-money call (credit). Here, the premiums for the debit and credit are nearly the same. Therefore, there would be little or no cost for the person seeking the hedge. However, this position places a cap on the potential reward for ...

Gross
The aggregate, cumulative or total amount is a quantity measure. It can refer to total long position, total short position, the total par position, total market value, the total futures contract equivalency position or other specified categorization.

Platykurtic (Platykurtosis)
Describes the relatively flat condition for a distribution. This condition is evaluated against the normal distribution and its attendant bell-shaped curve.

Positive Carry
The condition whereby a portfolio after financing considerations still generates a positive income.

X or Cross Trade
A transaction that is not exposed to the public by outcry or usual trading practices. This type of trade is permissible provided it is done in accordance with the rules and regulations of the particular exchange and other regulatory organizations. The letter X can indicate this type of transaction on a ticker tape. It may be also used on a ticket or blotter.

Position liquidation
The closing out of a long position. The term is sometimes used to denote closing out a short position, but this is more often referred to as covering.

Deposit Notes
A term deposit in a bank. Deposit notes, like medium-term notes, may serve as the basis for an equity or currency-linked risk management structure.

Market Index Deposits (MIDs)
Bank certificates of deposit or deposit notes with a return linked to the performance of an index, usually a stock market index.

Profit and Loss Account
An accounting statement that shows a company's trading position over a given period of time - usually the financial year. This statement details the sales revenue and business expenditure over the period. In the account, the cost of sales is deducted from the sales income to provide a gross profit. From this, other items of expenditure, such as salaries, rent, rates and other itemised costs are deducted to show a net profit (or loss). In US and under IFRS known as the Income Statement.