O

OCO
Means one cancels the other.  This is where a broker is given two alternative orders. As soon as one is executed, the other order is cancelled.

OFF PEAK
Times of relatively low energy demand, typically nights and weekends.

OFF SPECIFICATION
Oil product or gas that does not meet specification. Refers either to contract specification or those benchmark specifications generally used in the physical market.

ONE CANCELS THE OTHER
Where a broker is given two alternative orders. As soon as one is executed, the other order is cancelled.

ONE DAY IN TEN YEARS
Reliability standard often applied to electric generation systems. Under this standard, a combination of forced and planned outages would leave the system without enough generation to meet load on a probabalistic basis on only one day in every 10 years.

ONE-FACTOR MODEL
A model or description of a system where the model incorporates only one variable, or uncertainty – the future price.

ONE IN TWENTY (1 in 20)
Peak day demand – the highest gas demand expected on any given day over a 20 year period.

ONE IN FIFTY (1 in 50)
The highest gas demand expected in one single year out of 50 years.

ON PEAK
Refers to hours of the business day when demand is at its peak.

OPEN ACCESS TRANSMISSION
The provision of electric transmission to third parties on a non-discriminatory basis.

OPEN ACCESS TRANSPORTATION
The transportation of gas or electricity for third parties on a non-discriminatory basis.

OPEN INTEREST
The number of outstanding obligations on an exchange-traded contract, usually a good indicator of commercial interest. There will always be an equal number of outstanding buy and sell obligations since these commitments represent completed deals.

OPERATIONAL RISK
The risk that a firm’s internal practices, policies and systems are not adequate to prevent a loss being incurred, either because of market conditions or operational difficulties. Such deficiencies may arise from failure to measure or report risk correctly, or from a lack of controls over trading staff.

OPTION
A contract that gives the purchaser the right, but not the obligation, to buy or sell the underlying commodity at a certain price (the exercise, or strike, price) on or before an agreed date.

OUTAGES
A planned outage is the shutdown of a generating unit, transmission line, or other facility for inspection and maintenance, in accordance with an advance schedule. A forced outage is the unplanned loss of service of a generating unit, transmission line, or other facility for purposes other than inspection and maintenance.

OUT-OF-THE-MONEY
An option which has no intrinsic value. For calls, an option which has an exercise price above the market price of the underlying future. For puts, an option which has an exercise price below the futures price. The opposite is in-the-money.

OVER-THE-COUNTER
An over-the-counter or OTC deal is a customised derivative contract usually arranged with an intermediary such as a major bank or the trading wing of an energy major, as opposed to a standardised derivative contract traded on an exchange. Swaps are the commonest form of OTC instrument.

OWN USE GAS (OUG)
The gas which is taken from a pipeline to drive compressors or to pre-heat gas.