|Covered call writing strategy|
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Definition of Covered call writing strategy
Covered call writing strategy
A strategy that involves writing a call option on securities that the investor
acid test ratio (also called the quick ratio)
The sum of cash, accounts receivable, and short-term marketable
Active portfolio strategy
A strategy that uses available information and forecasting techniques to seek a
An arrangement whereby a security issue is canceled if the underwriter is unable
A strategy in which the maturities of the securities included in the portfolio are concentrated
A strategy in which a portfolio is constructed so that the maturities of its securities are highly
A passive investment strategy with no active buying and selling of stocks from the
An option that gives the right to buy the underlying futures contract.
a. An option to buy a certain quantity of a stock or commodity for a
Call an option
To exercise a call option.
A date before maturity, specified at issuance, when the issuer of a bond may retire part of the bond
Call money rate
Also called the broker loan rate , the interest rate that banks charge brokers to finance
An option contract that gives its holder the right (but not the obligation) to purchase a specified
A contract that gives the holder the right to buy an asset for a
Right to buy an asset at a specified exercise price on or before the exercise date.
The price, specified at issuance, at which the issuer of a bond may retire part of the bond at a
The price for which a bond can be repaid before maturity under a call provision.
A feature of some callable bonds that establishes an initial period when the bonds may not be
An embedded option granting a bond issuer the right to buy back all or part of the issue prior
The combination of cash flow uncertainty and reinvestment risk introduced by a call provision.
A swaption in which the buyer has the right to enter into a swap as a fixed-rate payer. The
A financial security such as a bond with a call option attached to it, i.e., the issuer has the right to
A bond that allows the issuer to buy back the bond at a
Bond that may be repurchased by the issuer before maturity at specified call price.
A strategy in which a put and with the same strike price and expiration are either both
a foundation for the compensation plan that addresses the role compensation should play in the organization
an organizational strategy in which company management decides to confront, rather than avoid, competition; an organizational strategy in which company management still attempts to differentiate company
cost leadership strategy
a plan to achieve the position in a
A short call option position in which the writer owns the number of shares of the underlying
Covered interest arbitrage
A portfolio manager invests dollars in an instrument denominated in a foreign
Covered or hedge option strategies
Strategies that involve a position in an option as well as a position in the
A put option position in which the option writer also is short the corresponding stock or has
Refers to multi-period cash flow matching.
A provision that prohibits the company from calling the bond before a certain date. During this
a technique for avoiding competition by distinguishing a product or service from that of competitors through adding sufficient value (including quality and/or features) that customers are willing to pay
when the incremental revenue from the sale of reworked defective units is greater than
Effective call price
The strike price in an optional redemption provision plus the accrued interest to the
Firm commitment underwriting
An undewriting in which an investment banking firm commits to buy the
With CMOs, the start of the cash flow cycle for the cash flow window.
A bond portfolio strategy whose goal is to eliminate the portfolio's risk against a
The right of the homeowner to prepay, or call, the mortgage at any time.
Import-substitution development strategy
A development strategy followed by many Latin American
Irrational call option
The implied call imbedded in the MBS. Identified as irrational because the call is
A bond portfolio strategy in which the portfolio is constructed to have approximately equal
A demand for additional funds because of adverse price movement. Maintenance margin
net income (also called the bottom line, earnings, net earnings, and net
A strategy of using futures for asset allocation by pension sponsors to avoid disrupting the
Passive investment strategy
See: passive management.
Passive portfolio strategy
A strategy that involves minimal expectational input, and instead relies on
Protective put buying strategy
A strategy that involves buying a put option on the underlying security that is
Provisional call feature
A feature in a convertible issue that allows the issuer to call the issue during the noncall
Put-call parity relationship
The relationship between the price of a put and the price of a call on the same
A strategy of introducing into the decision-making process a random element that is
A strategy that involves a position in one or more options so that the cost of buying an
Stock replacement strategy
A strategy for enhancing a portfolio's return, employed when the futures
the link between an organization’s goals and objectives
Structured portfolio strategy
A strategy in which a portfolio is designed to achieve the performance of some
A short call option position in which the writer does not own shares of underlying stock
A short put option position in which the writer does not have a corresponding short stock
Acting as the underwriter in a purchase and sale.
Evaluating and classifying potential risk of a client.
The portion of the gross underwriting spread that compensates the securities firms that
For an insurance company, the difference between the premiums earned and the costs
A group of investment banks that work together to sell new security offerings to
Yield to call
The percentage rate of a bond or note, if you were to buy and hold the security until the call date.
Naked option strategies
An unhedged strategy making exclusive use of one of the following: Long call
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