| 释义 |
guarantee letter Guarantee letterA commercial bank's letter assuring payment of the exercise price of a client's put option.Guarantee LetterIn put options, a guarantee of delivery of securities made by a bank to a brokerage on behalf of the bank's client. When an investor is writing a put option and does not have the cash available to buy the underlying asset if the option is exercised, the brokerage may require a guarantee letter in order to eliminate the risk that the investor will not be able to buy the underlying asset. See also: Cosigner, Letter of guarantee.guarantee letter A letter that is issued by a commercial bank guaranteeing that an investor who is writing a put option will pay the required sum in the event that the put is exercised against the investor. |