covered put option

covered put option definition - business

covered put option

A put option sold short by an investor who is short the underlying stock. If the put is later exercised, the investor will be required to purchase the underlying stock from the holder of the put. The stock will then be used to cover the short position in the stock.

The American Heritage® Dictionary of Business Terms Copyright © 2009 by Houghton Mifflin Harcourt Publishing Company. Published by Houghton Mifflin Harcourt Publishing Company. All rights reserved.

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