Limited-liability instrument

Limited-liability instrument

A security, such as a call option, in which the owner can lose only the initial investment.

Limited-Liability Instrument

An investment vehicle in which the maximum amount one may lose is the initial amount of the investment. An example is a long position on an option contract. If one does not exercise the option, the most one may lose is the premium. Likewise, a limited partner in any partnership is only liable for the amount of his/her investment in the event of liquidation.
Full browser ?