Operating Expenses

The cost incurred in operating every corporation or industry for any given period of time. It is sometimes not customary to include taxes, insurance, etc., as an operating charge, but unless a distinct separation is made of these items, so that the information shall not be kept from the investor, it is proper that they should be included either in "operating expenses" or "fixed charges." Wood-lock says that taxes properly belong under the latter. Others hold that taxes are an operating expense.

The Interstate Commerce Commission has prescribed for railroad companies the following classification for "operating expenses:" (1) Maintenance of Way and Structures, (2) Maintenance of Equipment, (3) Conducting Transportation, (4) General Expenses, all of which will be found explained under the several headings.

Operating Surplus

This is the profit remaining after taking into consideration all costs of every nature of operating any corporation or business industry for a given period of time. Whether or no taxes and insurance should be deducted before arriving at the amount of the "operating surplus" depends upon the system of bookkeeping; but unless they are deducted a distinct separation should be made so* that those interested should not be misled. Interest on capital, indebtedness, etc., should not be deducted before determining the " operating surplus."

Operators

Those who trade very heavily in the stock exchange or who are large buyers and sellers of securities on their own account, and whose actions more or less influence the trend of prices, are referred to as "operators." One who makes a profession of speculating may be considered under this heading.

0. P. Money. Money belonging to other people.

Optional After (Or Optional Bonds)

See "Net Return Upon the Investment."

Optional Bonds (Or Other Securities)

Bonds in which the right is reserved by the issuer to pay off at an earlier date than the actual date of maturity. A bond due in twenty years, but subject to redemption after ten years, is of this class, and would be termed a 10/20.

Option Day

The day on which options, that is, "puts," "calls," etc., must be declared, in accordance with London Stock Exchange rules, and which coincides with "contango day." (See that subject.)

Option Money

A payment to secure an option. See next subject.

Options

By "options" is understood either a "call," a "put," a "spread," or a "put-and-call." "Options," in reference to dealings in securities, mean the privilege of buying or selling, or a combination of buying and selling, a certain amount of securities at the expiration of, or within a given period, at prices determined at the time of the execution of the contract. In order to possess any of these rights, one must pay some other party a sum of money sufficient to induce him to take the risk of signing such a contract.

The price paid for an "option " is termed the " premium."