Limited risk

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Limited risk

The risk inherent in options contracts, which is much lower than that of a futures contract, which has unlimited risk. The maximum loss in buying a call option, for example, is the premium paid for the option.

Limited Risk

The risk on an investment in which the risk has a ceiling. That is, when an investor enters a position with limited risk, he/she is aware of the maximum amount he/she could possibly lose. Limited partners have limited risks on their investments as they cannot lose more than they originally invested. Likewise, buying a stock carries limited risk as the investor cannot lose more than the buy price of the stock. See also: Unlimited risk.
References in periodicals archive ?
The improvement in cardiovascular health that results from quitting smoking far outweighs the limited risks to cardiovascular health from the modest amount of weight gained after quitting, reports a National Institutes of Health-funded community study.
We think delaying a decision would be more damaging than the limited risks that are associated with a partial privatisation.
In general, Fitch believes that there are limited risks associated with AECI's off-system sales due to management's conservative risk management practices, reasonable pricing assumptions, strict counterparty credit limits, and the use of mostly non-firm hourly and day ahead transactions.
Fitch believes that there are very limited risks associated with these sales due to AECI's conservative risk management practices that include only nonfirm off-system sales, strict counter-party credit limits, and mostly hourly and day-ahead transactions.
Despite the policy to maintain separateness, MDU's regulated utilities therefore bear only limited risks associated with ownership of CEH.
Lant also told shareholders that the Company continues to investigate opportunities to redeploy cash reserves in new investments that offer attractive returns at limited risks.
The limited risks of the library district's operations and it's flexibility to govern expenses, mitigate concerns regarding these financial constraints.