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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. How to thank TFD for its existence? Tell a friend about us, add a link to this page, add the site to iGoogle, or visit webmaster's page for free fun content. |
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20 limited risk protection for short positions being held in the July 2007 contract. Virtually, this transfers risk from the cash market to the long calls--at limited risk. I chose to accept further limited risk, and lifted hedges. |
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