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Glossary of Financial Terms: U-V




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This article is from the Glossary of Financial Terms.

Glossary of Financial Terms: U-V

  • Uncovered call
    A short call option position in which the writer does not own shares of underlying stock represented by his option contracts. Also called a "naked" call, it is much riskier for the writer than a covered call, where the writer owns the underlying stock. If the buyer of a call exercises the option to call, the writer would be forced to buy the stock at market price.

  • Uncovered put
    A short put option position in which the writer does not have a corresponding short stock position or has not deposited, in a cash account, cash or cash equivalents equal to the exercise value of the put. Also called "naked" puts, the writer has pledged to buy the stock at a certain price if the buyer of the options chooses to exercise it. The nature of uncovered options means the writer's risk is unlimited.

  • Underlying security
    Options: the security subject to being purchased or sold upon exercise of an option contract. For example, IBM stock is the underlying security to IBM options. Depositary receipts: The class, series and number of the foreign shares represented by the depaositary receipt.

  • Volatility
    A measure of risk based on standard deviation in fund performance over 3 years. Scale is 1-9; higher rating indicates higher risk.

  •  Std Deviation  Rating   Std Deviation  Rating
      up to 7.99      1      20.00-22.99      6
      8.00-10.99      2      23.00-25.99      7
     11.00-13.99      3      26.00-28.99      8
     14.00-16.99      4      29.00 and up     9
     17.00-19.99      5 
    

 

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