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Covered warrant |
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Covered warrantA security which gives the holder the right to acquire a share or bond at a specific price and date. Covered warrants are created by an investment bank or some other financial institution, and are not issued by the company itself.Similar MatchesUncovered optionsUncovered optionsSee: Naked options Covered Straddle WriteCovered Straddle WriteThe term used to describe the strategy in which an investor owns the underlying security and also writes a straddle on that security. This is not really a covered position. Covered combinationCovered combinationA strategy in which one call and one put with the same expiration, but different strike prices, are written against each 100 shares of the underlying stock. Example: writing 1 XYZ Jun 50 call and 1 XYZ Jun 55 put, and buying 100 shares of XYZ stock. In actuality, this is not a fully 'covered' strategy because assignment on the short put would require purchase of additional stock. Covered interest arbitrageCovered interest arbitrageA combination of transactions on two countries' securities and exchange markets designed to profit from failure of covered interest parity. A typical set of transactions would include selling bonds in one market, using the proceeds to buy spot foreign currency and foreign bonds, and selling forward the return at a future date. See also one-way arbitrage. Covered writerCovered writerAn investor who writes options only on stock that he or she owns, so that option positions may be collected. Further SuggestionsCovered Interest Rate ParityCovered covered writing Covered position Covered call writing strategy Uncovered call writing Covered or hedge option strategies covered straddle uncovered Uncovered interest parity Covered position Covered option Covered interest rate Uncovered Put writing Covered interest parity Covered Straddle Covered interest arbitrage Covered call |
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