What is COVERED POSITION?

An outright LONG POSITION or SHORT POSITION that is protected by an offsetting HEDGE. Depending on the nature of the hedge, a covered position may have only negligible MARKET RISK and CREDIT RISK exposures. See also NAKED POSITION.

More On This Topic



Link to This Definition
Did you find this definition of COVERED POSITION helpful? You can share it by copying the code below and adding it to your blog or web page.
Written and fact checked by The Law Dictionary