What Are Covered Earnings? Covered earnings refer to the total amount of an employee’s pay that counts toward the calculation of retirement benefits. Generally, the bulk of covered earnings comes from an employee’s base pay, though occasionally other types of compensation factor in as well. In the U.S., the Social Security Administration uses covered earnings to
What Is Covered Interest Arbitrage? Covered interest arbitrage is a strategy in which an investor uses a forward contract to hedge against exchange rate risk. Covered interest rate arbitrage is the practice of using favorable interest rate differentials to invest in a higher-yielding currency, and hedging the exchange risk through a forward currency contract. Covered
What Is Covered Interest Rate Parity? Covered interest rate parity refers to a theoretical condition in which the relationship between interest rates and the spot and forward currency values of two countries are in equilibrium. The covered interest rate parity situation means there is no opportunity for arbitrage using forward contracts, which often exists between countries with different
What Is a Covered Stock (Coverage)? A covered stock refers to a public company’s shares for which one or more sell-side equity analysts publish research reports and investment recommendations for their clients. Upon commencement of coverage, an analyst will publish an “initiating coverage” report on the stock and subsequently issue research updates, often after quarterly and annual
What Is Covered Warrant? A covered warrant is a type of warrant where the issuer is a financial institution rather than an individual company and offers the right, but not obligation, to buy or sell an asset at a specified price on or before a specified date. Key Takeaways A covered warrant is a type
What Is a Covered Writer? A covered writer is an investor or trader who holds the underlying security as a hedge against the options contract they are selling. Since the investor already owns the underlying asset, they may cover any call before or at the expiration date of the option, thus limiting risk. Key Takeaways
What Is a Cover Letter? A cover letter is a written document commonly submitted with a job application outlining the applicant’s credentials and interest in the open position. Since a cover letter is often one of only two documents sent to a potential employer, a well- or poorly-written letter can impact whether the applicant is
What Is a Cover Note? A cover note is a temporary document issued by an insurance company that provides proof of insurance coverage until a final insurance policy can be issued. A cover note is different from a certificate of insurance or an insurance policy document. A cover note features the name of the insured, the insurer, the
What is Cover On A Bounce? Cover on a bounce is a stock trading term that means to cover a position by trading after the stock price has bounced off a support level. The strategy involves waiting for the stock to go low enough to hit a support level, then bounce briefly, then go slightly lower to
What is Cover Your Ass “Cover your ass” refers to a tactic used by workers and organizations to share or divert blame or provide a disclaimer should something go wrong. “Covering your ass” is usually done in big projects where an employee may choose to avoid taking credit for doing a critical part of the project just in
