LEG OUT
One part of a complex option trade or investment strategy. It means to close out or unwind the leg of a derivative position. This is effective in eliminating any other possibility of a loss or a gain from the leg of that position. But if the original transaction has multiple legs, legging out of one transaction leg can still make the investor exposed to other legs of that trade. This is done to close the trade altogether. Examples of multi-legged trades are straddles, straps, strangles, and spreads.
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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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