The Prop Trader's Dictionary

From drawdown rules to payout splits — every term you need to understand, master, and pass your challenge.

O

Offset Net Worth

Offset net worth refers to the practice of using assets or gains in one area to balance or reduce liabilities and losses in another, effectively neutralising a portion of the financial exposure. It is a concept used in personal finance, corporate balance sheets, and portfolio management. The goal is to present a more balanced picture of overall financial health.

Learn more

Opportunity Cost

Opportunity cost is the potential benefit or value that is foregone when choosing one option over another. In trading and investing, it represents the return that could have been earned by allocating capital to an alternative strategy or asset. Recognising opportunity cost is essential for making efficient capital allocation decisions.

Learn more

Options Trading

Options trading involves buying or selling contracts that give the holder the right, but not the obligation, to buy or sell an underlying asset at a specified price before or on a certain expiry date. Call options give the right to buy, while put options give the right to sell. Options are used for speculation, income generation, and hedging purposes.

Learn more
Selected glossary section

3+ terms

Explore all glossary terms currently grouped under the letter "O".