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. The New York Times Financial Glossary

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covered put UK US noun [C] (also covered put option)
FINANCE an agreement that allows you to sell shares, bonds, etc. which you own or have enough money in an account to buy, before a fixed date for a fixed price

Financial and business terms. 2012.

Look at other dictionaries:

  • covered put — The sale of a put option while holding sufficient cash to buy the underlying. American Banker Glossary 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… …   Financial and business terms

  • covered option — option position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option ( naked option strategies). Bloomberg Financial Dictionary * * * covered option covered option ➔ option * * * covered option… …   Financial and business terms

  • put someone out to pasture — put (someone) out to pasture to make someone stop working at their job because they are too old to be useful. At 62, he felt he was not ready to be put out to pasture. Etymology: based on the tradition of keeping farm animals that are too old to… …   New idioms dictionary

  • put out to pasture — put (someone) out to pasture to make someone stop working at their job because they are too old to be useful. At 62, he felt he was not ready to be put out to pasture. Etymology: based on the tradition of keeping farm animals that are too old to… …   New idioms dictionary

  • Covered call — Payoffs and profits from buying stock and writing a call. A covered call is a financial market transaction in which the seller of call options owns the corresponding amount of the underlying instrument, such as shares of a stock or other… …   Wikipedia

  • Covered warrant — In finance a covered warrant (sometimes called naked warrant) is a type of warrant that has been issued without an accompanying bond or equity. Like a normal warrant it allows the holder to buy or sell a specific amount of equities, currency or… …   Wikipedia

  • Put-Call-Parität — Eine Option bezeichnet in der Wirtschaft ein abgeleitetes Finanzgeschäft (so genanntes Derivat). Mit einer Option erhält man das Recht, ein Wertpapier oder ein anderes Produkt zu einem späteren Zeitpunkt zu einem vorher vereinbarten Preis zu… …   Deutsch Wikipedia

  • covered — A written option is considered to be covered if the writer also has an opposing market position on a share for share basis in the underlying security. That is, a short call is covered if the underlying stock is owned, and a short put is covered… …   Financial and business terms

  • put — An option contract giving the buyer the right to sell something at a specified price within a certain period of time. A put is purchased in expectation of lower prices. If prices are expected to rise, a put may be sold. The seller receives the… …   Financial and business terms

  • Covered — Cover Cov er (k?v ?r), v. t. [imp. & p. p. {Covered} ( ?rd); p. pr. & vb. n. {Covering}.] [OF. covrir, F. couvrir, fr. L. cooperire; co + operire to cover; probably fr. ob towards, over + the root appearing in aperire to open. Cf. {Aperient},… …   The Collaborative International Dictionary of English

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