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.

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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 >>
  2. 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 >>
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  4. How is a put option exercised?

    A put option is a contract that gives the option holder the right, but not obligation, to sell a set amount of shares (1 ... Read Answer >>
  5. When holding an option through expiration date, are you automatically paid any profits, ...

    Holding an option through the expiration date without selling does not automatically guarantee you profits, but it might ... Read Answer >>
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