Meaning of COVERED POSITION in English


A transaction which has been offset with an opposite and equal transaction; for example, if a gold futures contract had been purchased, and later a call option for the same commodity amount and delivery date was sold, the trader's option position is "covered." He holds the futures contract deliverable on the option if it is exercised. Also used to indicate the repurchase of previously sold contracts as, he covered his short position.

A guide to futures and options market technology English dictionary.      Английский словарь-руководство по фьючерсам и опционам рыночных технологий .