Protect

Definition:

Assure the salesperson or trader that interest, buy or sell, will be attended to, given any change in the trading circumstances, as follows:
At a price: If the stock trades at a certain price or price range, the trader will show this market to the salesperson and thus allow participation under these favorable circumstances.
Floor protection: Representation of a client on the floor of the exchange-so that if size were to trade at his price or a better price, salesperson would participate.
Volume (OTC): If a certain amount of volume trades (that parallels the protectee's interest), trader assures salesperson of reasonable participation in the trading activity. The extent of this protection depends on liquidity, number of market makers, and other aspects of the stock.

Investing Essentials


Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

Term of the Day

FLEX Options

Exchange traded equity or index options, where the investor can specify within certain limits the terms of the options, such as exercise price Expiration date, exercise type, and settlement... Read More

Subscribe to the Term of the Day via email Get the Term of the Day in your inbox!


Create your free portfolio