Escrow Receipt

Escrow Receipt

A bank guarantee that an option writer has the underlying security on deposit and that the underlying security is readily available for delivery if the option is exercised.

Notes:

The use of escrow accounts and receipts provides further evidence and security that the securities are available to complete the transaction.

See also: Cover, Escrow, Escrow Agreement, Exercise, Option, Security, Underlying, Writer

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Escrow receipt

A document provided by a bank in options trading to guarantee that the underlying security is on deposit and available for potential delivery.