Cover

Cover

The act of completing an offsetting transaction so as to eliminate a liability or obligation. It is generally used in the context of risk exposure, as when an investor decides to cover a short position in a stock to eliminate the risk of a "short squeeze." Covers normally reduce both risk and return of a particular position.

The term "cover" is distinct from "coverage," which, in the world of finance, indicates financial ratios that measure a company's margin of safety in servicing its debt and making dividend payments.

As a generic term, "cover" has a number of different connotations, but it's mainly used to indicate an act of lowering risk exposure. For instance, in the currency markets, the term forward cover is used to denote forward currency transactions that are undertaken for hedging purposes, to reduce currency risk.


Investment dictionary. . 2012.

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  • Cover — or covers may refer to: Contents 1 Science and technology 2 Deception and concealment 3 Mathematics …   Wikipedia

  • cover — cov·er 1 vt 1: insure this policy cover s other family drivers 2: to give protection against or compensation or indemnification for doesn t cover flood damage vi: to obtain cover …   Law dictionary

  • cover — ► VERB 1) put something over or in front of (someone or something) so as to protect or conceal. 2) spread or extend over. 3) deal with. 4) travel (a specified distance). 5) (of money) be enough to pay for. 6) (of insurance) protect against a… …   English terms dictionary

  • Cover — Cov er (k?v ?r), v. t. [imp. & p. p. {Covered} ( ?rd); p. pr. & vb. n. {Covering}.] [OF. covrir, F. couvrir, fr. L. cooperire; co + operire to cover; probably fr. ob towards, over + the root appearing in aperire to open. Cf. {Aperient}, {Overt},… …   The Collaborative International Dictionary of English

  • cover — [kuv′ər] vt. [ME coveren < OFr covrir < L cooperire < co , intens. + operire, to hide < IE * op wer , to cover < * op(i) , back, against + * wer, to cover, protect > WARN] 1. to place something on, over, or in front of, so as to …   English World dictionary

  • Cover — Cov er (k?v ?r), n. 1. Anything which is laid, set, or spread, upon, about, or over, another thing; an envelope; a lid; as, the cover of a book. [1913 Webster] 2. Anything which veils or conceals; a screen; disguise; a cloak. Under cover of the… …   The Collaborative International Dictionary of English

  • cover — vb Cover, overspread, envelop, wrap, shroud, veil are comparable when meaning to put or place or to be put or placed over or around. Cover may imply the putting or placing by a conscious agent or unconscious agency of something on top {cover a… …   New Dictionary of Synonyms

  • Cover Up — Cover Up(s) may refer to: Cover up, concealment of a scandal Music Cover Up (UB40 album) Cover Up (Ministry album) Cover Ups, an album by Good Riddance Other media Cover Up (TV series), a television spy drama on CBS from 1984 1985 Cover Up… …   Wikipedia

  • cover — [n1] wrapping, cover up awning, bark, binding, camouflage, canopy, canvas, cap, caparison, case, ceiling, cloak, clothing, coating, covering, coverlet, disguise, dome, dress, drop, envelope, facade, false front*, fig leaf, front, guise, hood,… …   New thesaurus

  • Cover Me — may refer to: Cover Me Canada, a Canadian music reality show Cover Me (film), a 1995 American thriller Cover Me (song), a 1984 song by Bruce Springsteen Cover Me , a song by Björk on her 1996 album Post Cover Me (3 track EP), a song by Tom McRae… …   Wikipedia

  • Cover — steht für: ein Musikstück, das nicht vom Original Interpreten gespielt wird, siehe Coverversion eine Titelseite eine Klappe, siehe CD und DVD Verpackungen eine Buchhülle, siehe Bucheinband ein Schallplattencover eine Schutzhülle bei VHS Kassetten …   Deutsch Wikipedia

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