Capping
Definition
Effecting transactions in an instrument underlying an option shortly before the option's expiration date to depress or prevent a rise in the price of the instrument so that previously written call options will expire worthless, thus protecting premiums previously received. See Pegging.
Related Terms Other terms related to 'Capping' starting with the letter 'C' Commodity Futures Trading Commission CFTC, Clearing Association, Core Principle, Cox Ross Rubinstein Option Pricing Model, Currency Swap
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