AIMA

The Alternative Investment Management Association

Alternative Investment Management Association Representing the global hedge fund industry

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Glossary

AIMA's Glossary has been developed for all those with an interest in the alternative investment industry - from the beginner to the advanced practitioner.

You will find a considerable overlap of content with the traditional fund management industry - the instruments used, the service providers employed, etc.  However, the hedge fund industry is individual in the way in which it uses these resources.

For reasons of law and accuracy, this is not a wiki.  It is a work-in-progress, however, and we invite you to submit new items for inclusion below (including the proposed definition).

  • We express our sincere thanks to Stanley Marchon, Vincent Kuhn, Nicolas Watin-Augouard, Stephen Foster and Sunil Gopalan for the creation of this resource. 
  • Special thanks are also extended to Anne Taulbut and Jennifer Nye of Katten Muchin Rosenman Cornish for the extensive legal review.
 
off-exchange

See Over-the-counter.

offer

An indication of willingness to sell at a given price; opposite of Bid.

offer document

A term used for a document combining a prospectus and an investment statement.

offering memorandum

See Prospectus.

offset

Liquidating a purchase of futures contracts through the sale of an equal number of contracts of the same delivery month, or liquidating a short sale of futures through the purchase of an equal number of contracts of the same delivery month. See Closing out.

offshore fund

An investment vehicle that is domiciled outside the manager’s domicile, typically in a jurisdiction with no or very low taxes, such as Bermuda, British Virgin Islands, Cayman Islands, Dublin, or the Channel Islands, and has no limit on the number of investors it can take on. Although the fund's securities transactions occur on on-shore exchanges and are executed by an on-shore manager, or general partner, its administration and audits are conducted offshore, usually in a tax haven like the Cayman Islands.

Omega

Omega is the probability weighted ratio of gains to losses, relative to a pre-defined return threshold. It captures all of the higher moment information in the returns distribution and also incorporates sensitivity to return levels.

open outcry

A method of trading, common to most US futures or options exchanges, where trading occurs on a trading floor and traders may bid and offer simultaneously either for their own accounts or for the accounts of customers. Transactions may take place simultaneously at different places in the trading pit or ring. At almost every exchange outside the US, open outcry has been replaced by Electronic Trading Platforms. See Specialist system.

open-ended product/fund

A product that is permanently open for investment. New units (shares, bonds, units) are created or dissolved as required. Investors can subscribe for or redeem these units at the prevailing net asset value per unit in accordance with the details set out in the relevant product/fund prospectus.

opening

The period at the beginning of the trading session officially designated by the exchange during which all transactions are considered made "at the opening".

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