Pegging


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Pegging

Making transactions in a security, currency, or commodity in order to stabilize or target its value through market intervention.

Pegging

1. The practice of fixing the exchange rate of a currency to the value of another currency. Most countries that peg their currencies do so to the U.S. dollar, though some peg to currency baskets. See also: Fixed exchange rate.

2. The act of buying a security in a large quantity to drive up the price. Writers of put options (and holders of short positions) practice pegging when the expiration date is approaching and it appears that the option will be exercised such that it puts the writer at a disadvantage. The idea behind pegging is to cause the price to rise so the option is not exercised and the writer can profit from the premium.
References in classic literature ?
But huntin' as large a country as we do, we mayn't be back at that village for a month, and if the dressings ain't renewed, and gangrene sets in, often as not you find your man pegging about on his stumps.
It's only a question of sticking to it and pegging away"
But his adversary being a rigid disciplinarian, and subject to an occasional weakness in respect of pegging more than she was entitled to, required such vigilance on his part, as left him neither eyes nor ears to spare.