Escrow Receipt

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
  1. Allocation Notice

    An official notification from an options clearing firm to the ...
  2. Escrow Agreement

    A legal documents that outlines the terms and conditions between ...
  3. Writer

    The seller of an option who collects the premium payment from ...
  4. Pin Risk

    A risk that the writer of an options or futures contract faces ...
  5. Escrow

    A financial instrument held by a third party on behalf of the ...
  6. Option

    A financial derivative that represents a contract sold by one ...
Related Articles
  1. Home & Auto

    What does "In Escrow" Mean?

    Escrow is a financial agreement involving two parties, usually a buyer and a seller. The buyer deposits money, securities or other funds into the escrow account, where they are held until both ...
  2. Options & Futures

    Options Hazards That Can Bruise Your Portfolio

    Learn the top three risks and how they can affect you on either side of an options trade.
  3. Options & Futures

    4 Reasons To Hold Onto An Option

    There are times when an investor shouldn't exercise an option. Find out when to hold and when to fold.
  4. Stock Analysis

    Covered Calls: A Simple Way to Generate Income on the Stocks You Own

    Option trades, like any other market trade, involve a buyer and seller in order to complete the transaction. The buyer of a call option has the right to buy the underlying security at the strike ...
  5. Active Trading

    What's a Marketable Security?

    Marketable securities are financial instruments that can be readily bought and sold in a public market. The key feature is the ease with which it can be sold and converted into cash. Usually, ...
  6. Options & Futures

    Exploring The World Of Exotic Options

    Exotic options provide investors with new alternatives to manage their portfolio risks and speculate on various market opportunities. The pricing for such instruments is considerably complex, ...
  7. Options & Futures

    Introduction - Day Trading and Options

    Options have not been a tradition part of day-trading strategy, but this is quickly changing.
  8. Professionals

    Becoming A Financial Writer

    Instead of working on Wall Street, write about it.
  9. Trading Strategies

    A Guide Of Option Trading Strategies For Beginners

    Options offer alternative strategies for investors to profit from trading underlying securities, provided the beginner understands the pros and cons.
  10. Options & Futures

    Three Ways to Profit Using Put Options

    A brief overview of how to profit from using put options in your portfolio.
RELATED FAQS
  1. Who manages an escrow account?

    Managing an escrow account is a job for a trusted and experienced service provider. Discover the best personal finance solutions ... Read Answer >>
  2. Does the bank set up an escrow account for the buyer and seller in a home sale?

    Learn about the process of escrow and who is responsible for setting up escrow accounts for the buyer and seller in the purchase ... Read Answer >>
  3. 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 >>
  4. When is a put option considered to be "in the money"?

    Learn about put options, what they are, how these financial derivatives operate and when put options are considered to be ... Read Answer >>
  5. How do I change my strike price once the trade has been placed already?

    Learn how the strike prices for call and put options work, and understand how different types of options can be exercised ... Read Answer >>
  6. Do landlords set up escrow accounts for their tenants' security deposits?

    Learn when and why landlords place rental property security deposits in separate escrow accounts to make sure the money is ... Read Answer >>
Hot Definitions
  1. Reverse Mortgage

    A type of mortgage in which a homeowner can borrow money against the value of his or her home. No repayment of the mortgage ...
  2. Labor Market

    The labor market refers to the supply and demand for labor, in which employees provide the supply and employers the demand. ...
  3. Demand Curve

    The demand curve is a graphical representation of the relationship between the price of a good or service and the quantity ...
  4. Goldilocks Economy

    An economy that is not so hot that it causes inflation, and not so cold that it causes a recession. This term is used to ...
  5. White Squire

    Very similar to a "white knight", but instead of purchasing a majority interest, the squire purchases a lesser interest in ...
  6. MACD Technical Indicator

    Moving Average Convergence Divergence (or MACD) is a trend-following momentum indicator that shows the relationship between ...
Trading Center