guarantee letter

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Guarantee letter

A commercial bank's letter assuring payment of the exercise price of a client's put option.

Guarantee Letter

In put options, a guarantee of delivery of securities made by a bank to a brokerage on behalf of the bank's client. When an investor is writing a put option and does not have the cash available to buy the underlying asset if the option is exercised, the brokerage may require a guarantee letter in order to eliminate the risk that the investor will not be able to buy the underlying asset. See also: Cosigner, Letter of guarantee.

guarantee letter

A letter that is issued by a commercial bank guaranteeing that an investor who is writing a put option will pay the required sum in the event that the put is exercised against the investor.
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References in periodicals archive ?
In international regulations of guarantee letters, provisions 6-06 to 6-10[11] are related to the review of proceeds assignment regulations.
The issuer bank, designated bank or any other authorized person who acts on the basis of the guarantee letter will not be committed to assign proceeds on behalf of the beneficiary and will be at liberty to accept or reject it (if accepted, it will be sent to the beneficiary in the form of letters, emails, telex or swift messages).
A joint press release issued by the organizations states that, "The EIB will guarantee up to $520 million of selected World Bank loans in Ukraine, which will enable the World Bank to guarantee letters of credit facilities for gas purchases by Naftogaz.
NCA also adopted two loan guarantee letters dated April 25, 2012.
Sayga Flour Mills, which is part of DAL Group, relies on Byblos Bank, Abu Dhabi National Bank and Saudi Sudanese Bank to provide Guarantee Letters for the purposes of importing wheat and other production items.
He sent copies of the guarantees, which the accused had given him, to the authorities and he learnt that the guarantee letters were forged.
At present, the government only acknowledges the effect of guarantee letters issued by foreign banks with Taiwanese branches or those ranking among top 1,000 banks worldwide.
OFID will guarantee letters of credit (LC) issued by banks in developing countries to support trade transactions of local corporates.
3316 / 2005, which is either a) a guarantee letters TSMEDE or banks operating legally in Greece or in any Member - State of the EU or the EEA or the WTO, or b) a recommendation deposit equivalent amount or equivalent value of securities in T.
In this case, it is possible to issue Letters of more one, covering a combined total amount of the guarantee, provided that they guarantee Letters will be issued each for all members of the consortium / association and not for individual members separately.
If the text of Guarantee Letters are not written in Greek or in English, accompanied by an official translation certified by a competent authority, in Greek or in English.
Guarantees submitted as guarantee letters of credit institutions or other legal entities that operate legally in Member States of the European Union and are in accordance with the applicable right.