covered position
Definition
Hedged position in a futures market. Writer of a call option (right to buy) or put option (right to sell) who owns the corresponding long position or short position on the underlying asset (security) is in a covered position—he or she is protected from the risks of price fluctuations. Opposite of naked position.
covered position is in the Commodities & Precious Metals Trading, Currency Trading, Disaster Planning & Risk Management and Securities & Futures Trading subjects.
covered position appears in the definition of the following term: naked position
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