DEFINITION of '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.

BREAKING DOWN 'Escrow Receipt'

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

RELATED TERMS
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RELATED FAQS
  1. Do mortgage escrow accounts earn interest?

    Paying down monthly mortgage escrow accounts? Will you receive any interest on this payment? If you are, should you put more ... Read Answer >>
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    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
  3. How does the bank profit off of escrow accounts?

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