Limited risk(redirected from Limited Risks)
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.
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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.
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