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Super Finance Glossary

Over 10,000 financial glossary terms...

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Browsing by the letter "C"

Displaying next 680 results of 977
Coupon Rate
Definition: In bonds, notes, or other fixed income securities, the stated percentage rate of interest, usually paid twice a year.
Covariance
Definition: A statistical measure of the degree to which random variables move together. A positive covariance implies that one variable is above (below) its mean value when the other variable is above (below) its mean value.
Covenant
Definition: An agreed action to be undertaken (Positive) or not done (Negative). A breach of a covenant is a default.
Cover
Definition: The amount above UNITY of a debt service ratio.
Coverage Initiated
Definition: Usually refers to the fact that analysts begin following a particular security. This usually happens when there is enough trading in it to warrant attention by the investment community.
Coverage Ratios
Definition: Ratios used to test the adequacy of cash flows generated through earnings for purposes of meeting debt and lease obligations, including the interest coverage ratio and the fixed-charge coverage ratio.
Covered
Definition: A 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 Call
Definition: A short call option position in which the writer owns the number of shares of the underlying stock represented by the option contracts. Covered calls generally limit the risk the writer takes because the stock does not have to be bought at the market price, if the holder of that option decides to exercise it.
Covered Call Writing Strategy
Definition: A strategy that involves writing a call option on securities that the investor owns. See: Covered or hedge option strategies.
Covered Foreign Currency Loan
Definition: A loan denominated in a currency other than that of the borrower's home country, for which repayment terms are prearranged through the use of a forward currency contract.
Covered Interest Arbitrage
Definition: Occurs when a portfolio manager invests dollars in an instrument denominated in a foreign currency and hedges the resulting foreign exchange risk by selling the proceeds of the investment forward for dollars.
Covered Interest Rate Parity
Definition: The principle that the yields from interest-bearing foreign and domestic investments should be equal when the currency market is used to predetermine the domestic currency payoff from a foreign investment.
Covered Option
Definition: Option position that is offset by an equal and opposite position in the underlying security. Antithesis of naked option.
Covered Or Hedge Option Strategies
Definition: Strategies that involve a position in an option as well as a position in the underlying stock, designed so that one position will help offset any unfavorable price movement in the other, including covered call writing and protective put buying. Related: Naked strategies
Covered Position
Definition: Use of an option in a trading strategy in the underlying asset which is already owned.
Covered Put
Definition: A put option position in which the option writer also is short the corresponding stock or has deposited, in a cash account, cash or cash equivalents equal to the exercise price of the option. This limits the option writer's risk because money or stock is already set aside. In the event that the holder of the put option decides to exercise the option, the writer's risk is more limited than it would be on an uncovered or naked put option.
Covered Straddle
Definition: An option strategy in which one call and one put with the same strike price and expiration are written against 100 shares of the underlying stock. In actually, this is not a "covered" strategy because assignment on the short put would require purchase of stock on margin. This method is also known as a covered combination.
Covered Straddle Write
Definition: The 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 Writer
Definition: An investor who writes options only on stock that he or she owns, so that option premiums may be collected.
Covering
Definition: Using forward currency contracts to predetermine the domestic currency amount of an expected future foreign receipt or payment. Also, the buying back ('covering') of a short position.
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