Open

Open Banking Finance Securities Computers Good-Till-Canceled Order Unpaid Balance File Management
The term 'Open' varies in meaning across different fields such as Banking, Finance, Securities, and Computers. It generally signifies the initiation of an action or status that is currently active and not yet completed.
On this page

Open

Definition

  • Banking: “Open” in banking generally refers to the establishment of a new account or a Letter of Credit. A Letter of Credit is a financial instrument from a bank guaranteeing that a buyer’s payment to a seller will be received on time and for the correct amount.

  • Finance: In finance, “open” refers to the unpaid balance of an account. This implies that there are still amounts owed which are yet to be settled.

  • Securities: The term “open” in securities refers to the status of an order to buy or sell securities that has still not been executed. This is also known as a Good-Till-Canceled (GTC) order, which remains in effect until it is executed or explicitly canceled by the investor.

  • Computers: In computing, “open” means to call up a file from a disk in order to work on it. You either create a new file or open a previously saved one.

Examples

  1. Banking: When you approach a bank to open a new checking account, the institution might require identification documents and initial deposits.

  2. Finance: If your credit card statement shows an open balance of $500, this means you still owe that amount to the credit card company.

  3. Securities: An investor places a Good-Till-Canceled order to buy 100 shares of Company XYZ. Until the order conditions are met or it is canceled by the investor, the order remains open.

  4. Computers: To edit a report, you open the document file stored on your computer’s hard drive.

Frequently Asked Questions

  1. What happens if I don’t settle an open balance?

    • If an open balance is not settled, it may accrue additional fees and interest, and could negatively impact your credit score.

  2. What are the risks of having open orders in securities trading?

    • Open orders in securities trading can be risky as market conditions can change, potentially filling the order at unfavorably high prices or leaving the order unfilled if the specified conditions are never met.

  3. Can I open more than one account in the same bank?

    • Yes, you can open multiple accounts in the same bank, subject to the bank’s policies and procedures.

  4. How do I open a file in a specific software program?

    • You can typically open a file by selecting ‘File’ in the menu bar of the software program and then clicking on ‘Open’. From there, you navigate to the file on your disk and select it.

  • Account: A banking record that tracks financial transactions for an individual or entity.

  • Letter of Credit: A bank guarantee that a buyer’s payment to a seller will be received on time and for the correct amount.

  • Good-Till-Canceled Order (GTC): An order to buy or sell a security that remains active until executed or explicitly canceled by the investor.

  • File Management: The system and practices of handling and organizing files on a computer.

Online References

  1. Investopedia - Letter of Credit
  2. Investopedia - Account Balance
  3. Investopedia - Good-Till-Cancelled Order
  4. Wikipedia - File Management

Suggested Books for Further Studies

  1. “Principles of Banking” by American Bankers Association
  2. “Fundamentals of Financial Accounting” by Fred Phillips, Robert Libby, and Patricia Libby
  3. “The Essentials of Trading: From the Basics to Building a Winning Strategy” by John Forman
  4. “Effective Project Management: Traditional, Agile, Extreme” by Robert K. Wysocki
  5. “File Organization and Management” by Mark Barker

Fundamentals of Open: Multidisciplinary Basics Quiz

### In banking, to "open" an account means what? - [x] Establish a new account or Letter of Credit. - [ ] Close an existing account. - [ ] Increase the balance of an existing account. - [ ] Apply for a loan. > **Explanation:** In banking, "open" means to establish a new account or a Letter of Credit. ### In finance, what does an "open balance" represent? - [ ] The total amount paid. - [ ] The interest earned on an account. - [x] The unpaid balance of an account. - [ ] The overdraft limit. > **Explanation:** An open balance refers to the amount that is still unpaid on an account. ### A Good-Till-Canceled order in securities trading is: - [x] An order that remains active until executed or canceled. - [ ] An order that only lasts for the trading day. - [ ] An automatic stop-loss order. - [ ] An order that must be modified weekly. > **Explanation:** An open order in securities, known as a Good-Till-Canceled (GTC) order, remains active until it is executed or explicitly canceled by the investor. ### In computing, what does the term "open" refer to? - [ ] Deleting a file. - [ ] Saving a file to disk. - [x] Calling a file up from disk to work on it. - [ ] Closing a file permanently. > **Explanation:** In computing, "open" refers to the action of calling up a file from disk in order to work on it. ### What is the primary risk of maintaining open orders in securities trading? - [ ] The order being forgotten. - [x] Market conditions changing unfavorably. - [ ] The securities firm going bankrupt. - [ ] Accruing interest. > **Explanation:** The primary risk is that market conditions can change unfavorably, filling the order at higher prices or leaving it unfilled. ### To open an unpaid balance in your account: - [ ] Contact customer support. - [ ] Make an additional deposit. - [x] Pay off the amount owed. - [ ] File a dispute. > **Explanation:** To resolve an open unpaid balance in your account, you need to pay off the amount owed. ### Which of the following is not required to open a new bank account? - [ ] Identification documents. - [ ] An initial deposit. - [x] A reference from another bank. - [ ] A completed application form. > **Explanation:** While identification, an initial deposit, and a completed application form are generally required, a reference from another bank is typically not necessary. ### How does a file appear when it is opened in software? - [ ] The data is converted to read-only mode. - [ ] It is duplicated in another directory. - [x] The file's contents are displayed for editing. - [ ] The file is saved automatically. > **Explanation:** When a file is opened in software, its contents are displayed for editing. ### What does it mean to "open" a Letter of Credit? - [x] Establish a new financial instrument guaranteeing payment. - [ ] Cancel a previously issued Letter of Credit. - [ ] Reduce the credit limit on your account. - [ ] Close the issuing bank. > **Explanation:** To open a Letter of Credit means to establish a new financial instrument that guarantees payment to a seller by a bank. ### A Good-Till-Canceled order will remain active unless: - [ ] The market closes. - [x] It is executed or explicitly canceled. - [ ] The investor forgets about it. - [ ] A fiscal year completes. > **Explanation:** A Good-Till-Canceled order will remain active until it is executed by the broker or explicitly canceled by the investor.

Thank you for exploring the multifaceted concept of “Open” and tackling our enlightening quiz questions. Keep expanding your knowledge across various disciplines!

Wednesday, August 7, 2024
Open Account
Online Trading
Account Statement January 1, 1
Clear January 1, 1
Position January 1, 1
Average January 1, 1
Blank Cheque January 1, 1
Cable Transfer January 1, 1
Callable January 1, 1
Capital at Risk January 1, 1
Cheque January 1, 1
Class January 1, 1

Accounting Terms Lexicon

Discover comprehensive accounting definitions and practical insights. Empowering students and professionals with clear and concise explanations for a better understanding of financial terms.