Capping

外汇网2021-06-19 13:46:28 146

1. The practice of selling large amounts of a commodity or security close to the options expiry date in order to pvent a rise in market price.

2. An attempt to keep a stock's price low or move its price lower by putting selling pssure on it.

1. The investor who might practice capping is a call option writer. If practicing capping, he or she is trying to avoid having to transfer the underlying security or commodity to the option holder. The goal is to have the option expire worthless so that the pmium initially received by the writer is protected.

2. This is a violation of NASD rules.

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