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Covered |
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CoveredA 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 (for margin purposes) if the underlying stock is also short in the account. In addition, a short call is covered if the account is also long another call on the same security, with a striking price equal to or less than the striking price of the short call. A short put is covered if there is also a long put in the account with a striking price equal to or greater than the striking price of the short put.Covered Similar MatchesCovered warrantCovered 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. Covered optionCovered optionOption position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option. 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 writerCovered writerAn investor who writes options only on stock that he or she owns, so that option positions may be collected. Uncovered interest parityUncovered interest parityEquality of expected returns on otherwise comparable financial assets denominated in two currencies, without any cover against exchange risk. Uncovered interest parity requires approximately that i = i* + a where i is the domestic interest rate, i* the foreign interest rate, and a the expected appreciation of foreign currency at an annualized percentage rate. Further SuggestionsuncoveredCovered call writing strategy Uncovered options Covered interest arbitrage Covered Straddle Covered position Uncovered Put writing covered straddle Covered interest arbitrage Covered interest rate covered writing Covered interest parity Covered Interest Rate Parity Covered position Covered or hedge option strategies covered combination Covered call Uncovered call writing |
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