Explanations of "Gold" investment-related terms A to Z

Open interest is the total number of outstanding futures contracts/options at the end of each trading day held by the market participants. It is calculated by counting the totals from either buyers or sellers (both are not added together) for any given market.

The opportunity cost is the cost of the best alternative that must be forgone in order to pursue a certain action. To simplify, it is what you have to give up to get something. For example, the opportunity cost of going to college is the money you would have earned if you had worked instead. Or if you spend the time going to a movie, you cannot spend that time at home reading a book, which is the opportunity cost of going to a movie. Similarly, the opportunity cost of an asset is what you give up by owning it. For example, the opportunity cost of investing in stocks is the yield on risk-free government bonds. Each investment decision entails some opportunity costs and gold is no different here.

Optimization is a term used in mathematics, computer science and economics. It refers to choosing the best available solution from a set of alternatives (variables). Optimization requires solving problems dealing with the maximization or minimization of a real function by taking into account all variables.

Options’ and Futures’ D-Day.

Expiration Date is the date on which the futures or options contract expires. The option holder can elect to either exercise the option or allow it to expire worthless. The owner of the futures contract must settle accounts with the other party on the expiration date to either pay or receive the difference between the agreed upon strike price and the actual market price of the underlying asset.

"If something rallies, options may rally many times more but the price for this leverage is that you have to be right on time."

The OTC Bulletin Board (or OTCBB) is an electronic inter-dealer quotation system to display real-time quotes, last-sale prices and volume information for over-the-counter (OTC) equity securities that are not listed on the Nasdaq, NYSE or other stock exchanges.

Ounce (abbreviated oz) is a unit of mass that has several definitions. Most commonly it refers to the weight of approximately 28 grams.

We can say that something (i.e. individual asset, entire market, technical indicator) is overbought when its value rises so high that (according to the technical analysis) it’s unlikely to advance even further. Generally, an overbought market is a sign that a downward correction is likely to occur. Traders use indicators such as Relative Strength Index (RSI), Stochastic Oscillator, Money Flow Index to identify overbought conditions. For example, one can view a given market as “overbought” if the RSI indicator for this market is above 70.

Overnight Positions is a term which is used in relation to trade on international financial, currency and commodity futures markets. A position can be defined as an exposure to the shifts in a specific market. Traders are exposed to the movement of markets when they place a buy or sell order on a specific market, i.e. they are in a position to profit from or incur losses from movements on the market or index.

In this instance trading refers to the buying and selling of financial products, currencies and commodities which take place on international markets. The improvement in information technology has opened access to a variety of financial markets across the globe and on some types of market (such as currency markets), it is now possible to trade 24 hours a day.

We can say that something (i.e. individual asset, entire market, technical indicator) is oversold when its value falls so low that (according to the technical analysis) it’s unlikely to decline even further. Generally, an oversold market is a sign that a rebound is likely to occur. Traders use indicators such as Relative Strength Index (RSI), Stochastic Oscillator, Money Flow Index to identify oversold conditions. For example, one can view a given market as “oversold” if the RSI indicator for this market is below 30.

An over-the-counter (OTC) market is a decentralized market, without a central physical location where market participants trade.