Condition: jumps if OF = 1. OF is the signed counterpart of CF. ADD sets it when two numbers of the same sign give a result of the other sign, SUB and CMP when the true difference falls outside the range (−128..127 for bytes, −32768..32767 for words). INC of 7Fh, DEC of 80h and NEG of 80h overflow too. IMUL and MUL set OF (with CF) when the upper half of the product is needed; AND, OR, XOR and TEST clear it.

Prints Y. As unsigned 60000 fits, so CF = 0: overflow and carry are different questions.
MOV     AX, 30000
ADD     AX, 30000  ; 60000 does not fit a signed word
MOV     DL, "Y"    ; MOV leaves the flags alone
JO      SHOW1      ; taken: DL stays "Y"
MOV     DL, "N"
SHOW1:
MOV     AH, 02h    ; DOS: print the character in DL
INT     21h

Use JO to catch errors in signed arithmetic, or INTO to send them all to one INT 4 handler. Unsigned overflow is reported in CF and tested with JC.

Range

On the 8086 JO exists only in the SHORT form: two bytes, opcode 70h and a signed 8-bit displacement counted from the end of the instruction. The target must lie within −128..+127 bytes of that point. To go farther, invert the test and hop over an unconditional JMP, which can reach the whole segment. MASM 6 makes this rewrite itself when it finds the target out of range (its default OPTION LJMP), so the listing may show two instructions where you wrote one.

JNO     SKIP1    ; the opposite test, a short hop
JMP     FARAWAY  ; any distance in the segment
SKIP1:

Later CPUs

The 80386 added a near form of every conditional jump, 0Fh 80h followed by a 16-bit displacement (32-bit in 32-bit code), so from the 386 on JO can reach anywhere in the segment. Code for the 8086 must stay with the short form.