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Bank guarantee letter

• Is a document by which an approved bank certifies that an put option writer or grantor has sufficient funds at the bank to cover the write. The funds are equal to the exercised value of the put. This value is equal to the strike price multiplied by the number of shares. It effectively reflects an outright purchase of the underlying security at the strike level.

 
 Embedded terms in definition
 Cover
Grantor
Option writer
Option
Purchase
Put option
Put
Security
Shares
Strike price
Underlying security
Underlying
Writer
Write
 
 Related Terms
 

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