Meaning COVERED PUT: A put option position in which the option writer also is short the corresponding stock or has deposited, in a cash account, cash or cash equivalents equal to the exercise of the option. This limits the option writer's risk because money or stock is already set aside. In the event that the holder of the put option decides to exercise the option, the writer's risk is more limited than it would be on an uncovered or naked put option
More terms such as Covered put in Dictionary C.
- Definition Cumulative Probability Distribution:
- Examples A function that shows the probability that the random variable will attain a value less than or equal to each value that the random variable can take on covered put definition.
- Definition Commodity Futures Contract:
- Examples An agreement to buy a specific amount of a commodity at a specified price on a particular date in the future, allowing a producer to guarantee the price of a product or raw material used in production covered put explain.
- Definition Cross-Share Holdings:
- Examples Often used in risk arbitrage. Corporations' or governments' equity share ownership in another corporation's shares covered put what is.
- Definition Certificates Of Amortized Revolving Debt (CARD):
- Examples Pass-through securities backed by credit card receivables covered put meaning.
- Definition Covered Or Hedge Option Strategies:
- Examples involve a position in an option as well as a position in the underlying stock, designed so that one position will help offset any unfavorable price movement in the other, including covered call covered put abbreviation.
