called away

Called Away

A term used to describe the elimination of a contract due to the obligation of delivery. This occurs if an option is exercised, if a redeemable bond is called before maturity or if a short position held in a security requires delivery.

Notes:

For example, if an investor has written a call option and the holder of the option exercises it, then the option has been "called away" and the writer has to complete his/her obligation to the contract.

When an investment is "called away", it can result in an investor missing out on potential gains in the underlying asset.

See also: Bond, Call, Callable Bond, Exercise, Maturity Date, Option, Short Sale, Underlying, Writer

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Called away

Convertible: Redeemed before maturity.
Option: Call or put option exercised against the stockholder.
Sale: Delivery required on a short sale.

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called away

Used to refer to the forced sale of a security by an investor because of the action of another party. For example, the writer of a call option has the underlying stock called away when the call owner exercises the option. Likewise, a bondholder may have bonds called away by the issuer if interest rates decline and the issuer decides to redeem a portion of the issue before maturity. In nearly all cases, a call works to the disadvantage of the owner of the security.