COVERED COMBINATION
Option strategy in which an investor sells an out-of-the-money call and put option with the same expiration date but different strike price. In essence, it is a combination of a covered call and short put position. This technique allows the investor to receive premium income by selling the cut and the put, in return for taking on the risk of doubling his stock position if the price drops below the strike price of the put by the maturity date.
POPULAR TERMS
Affirmative Covenant
A kind of contract or promise that requires a party to conduct some action. For example, a bond covenant which provides that the issuer must delive ...
Pure Risk
A risk where loss is the only potential outcome; there is no positive result. A pure risk is related to events that are out of control of the risk- ...
Efficiency
Performance level describing a process which uses the lowest amount of inputs to come up with the greatest amount of inputs. It is relative to usin ...
Tax Free
Goods and/or financial products that are not taxable. Having the tax free status allows an entity to save money and encourages additional spending ...
Reprice
A situation that is most often allowed for company executives or high-level employees. It permits them to trade in their options that out of the mo ...
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