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Glossary of Trade Terms

Ocean Bill of Lading
The classic document of the traditional export trade, it plays three potential roles:
As a receipt for the cargo and evidence that the goods have been received in apparent good order
Evidence of the terms of the contract of carriage between the shipper and the ocean carrier, and
An instrument enabling transfer of control over delivery of the goods (negotiability), which allows the holder of the bill to trade the goods in transit by simple endorsement and physical transfer of the bill.
Offered (selling) Rate
Exchange rate at which dealers are prepared to sell foreign exchanges in the market and at which potential buyers are therefore able to buy foreignexchange from those dealers.
A type of countertrade transaction. In an offset contract, which may be required by importers’ governments as a condition for approval of major sales agreements, the exporter makes an additional agreement to buy goods and services from the importer’s country. In a ‘direct offset’ transaction, an exporter may be required to establish manufacturing facilities in the importing country or to use a specified percentage of the components in the product sold from the importer’s country. In an indirect offset, an exporter may be obliged to buy goods or services from the importing country without any link to the product sold.
Order Notify.
Order of.
Open Account
This is a method of settling payment for trade transactions. The supplier ships required goods to the buyer who, after receiving and checking the related shipping documents, credits the supplier’s account in their books with the invoice amount.
The account is then settled periodically, say monthly, by the buyer sending a bank draft, or arranging through their bank an airmail or telegraphic remittance in favour of the exporter.
Open Policy (OP)
A type of insurance policy intended to cover an indefinite number of future individual shipments. The insurance contract remains in force until cancelled. Under the open policy, individual successive shipments are periodically reported or declared to the insurer and automatically covered on or after the inception date. Open policies can provide efficiency and savings for all parties concerned, especially when the insured conducts a significant volume of highly-similar transactions.
Open Position
Difference between total spot/forward purchases and spot/forward sales in a currency on which an exchange risk is run, or the difference between the totals of foreign currency assets and liabilities.
Optional Term Contracts
These forward exchange contracts usually have an option period between 15 and 30 days.
Order Bill of Lading
A negotiable bill of lading, which is made out to, or to the order of, a particular person and can be transferred by endorsement and delivery of the bill. In practice, the bill is made out either to the shipper’s order or to the consignee or their order.
An ‘outright (forward)’ is the purchase or sale of foreign currency for delivery at any forward date beyond two working days ahead.
A bill of exchange is said to be overdue when the time for its payment has passed, or if it is a bill payable on demand when it appears to have been in circulation for an unreasonable length of time as defined in the Bills of Exchange Act.
Owner’s Risk. Variations are:
• ORB - Owner’s Risk of Breakage
• ORF - Owner’s Risk of Fire
• ORL - Owner’s Risk of Loss (or leakage).