restricted option

restricted option definition - business

restricted option

An option in which an uncovered opening transaction cannot be made. An option becomes restricted when it closes at a price under $50 ( 1/2 point) and is out-of-the-money by more than 5 points. Restricted options are not prohibited for covered transactions or spreads.

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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