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Cushion theory |
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Cushion theoryThe theory that a stock with many short positions taken in it will rise, because these positions must be covered by the stock.Cushion theory Similar MatchesRedemption cushionRedemption cushionThe percentage by which the conversion value of a convertible security exceeds the redemption price (strike price). Cushion bondsCushion bondsHigh-coupon bonds that sell at only at a moderate premium because they are callable at a price below that at which a comparable noncallable bond would sell. Cushion bonds offer considerable downside protection in a falling market. 20% cushion rule20% cushion ruleGuideline that revenues from facilities financed by municipal bonds should exceed the operating budget plus maintenance costs and debt service by at least 20% to allow for unforeseen expenses. CushionCushionThe minimum period between the time a bond is issued and the time it is called. Safety cushionSafety cushionIn a contingent immunization strategy, the difference between the initially available immunization level and the safety-net return. |
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