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O

omega ratio
Omega is a function of a threshold. The returns above this threshold are considered as gains, while the returns below the threshold are considered as losses. Omega is then the ratio of the gains weighted by their probability of occurrence divided by the losses weighted by their probability of occurrence. The larger the omega, the better the performance.

operational risk
The risk that investment losses will result from factors other than market risk, credit risk, or liquidity risk, etc., but due instead to such things as employee fraud or misconduct, errors in models, incorrect or incomplete documentation of trades or man-made disasters.

opportunistic value investment strategy
A strategy that seeks to produce the greatest possible returns by assuming long-term positions in the most-efficient products at a given time. Such funds may hold a variety of investments including stocks, bonds, options, warrants, and distressed securities and which often pursue long/short investment strategies.

option
A contract that gives parties the right to buy, or sell, a specific asset or security at a specified strike price by a pre-set date. It falls under the derivatives category and comes in the form of calls (options to buy) and puts (options to sell). The cost of an option is generally a fraction of the cost of its underlying security.

options arbitrage investment strategy
An investment style that seeks to exploit pricing differentials between similar option contracts or between the price of an option contract and its associated securities.

options investment strategy
Any of a number of approaches in which the manager invests in option contracts.