Unlimited Risk

Unlimited Risk

The risk that one's loss on an investment will be larger than the amount one originally invested. For example, in short selling one will lose money if the short sold security rises in price. Because the potential rise in price is theoretically infinite, one may lose much more than one invests. Likewise, a general partner of a company has unlimited liability, meaning that in the event of bankruptcy he/she must pay all debts the company incurs regardless of how much he/she invested in it. See also: Limited liability.
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Speaking on the issue of Bitcoin which is registering record heights worldwide, Reddy said that there has to be a sovereign behind fiat money as only the sovereign can take unlimited risk and has the capacity to withstand strain.
So-called 'zero-cost' or 'zero-premium' options, which sound attractive in terms of initial upfront cost (there isn't one), should be treated with extreme caution-- zero-cost usually means unlimited risk. When you buy an option from a bank, you are literally asking that bank to transfer a risk you are facing onto their own books -- the premium is the price they charge for doing so.
Long straddle provides opportunities for unlimited rewards and limited risk, whereas short straddle offers limited rewards and unlimited risk. Unlike in the previously covered long call, bull call spread and covered call strategies, straddles have two break-even (no profit, no loss) points.
Saliba discusses which strategy to employ, the nuances of each, how to manage the position, when to exit, and how to use spread strategies that offer limited or unlimited risk. The text includes exercises, chapter quizzes, and a final exam--with answer keys--to reinforce the concepts presented in the book.
Rent-a-captives, unlike captives, can't take unlimited risk, regardless of how improbable that risk might be, since they must ensure each client receives its promised return.
By committing Europe's biggest economy - and already its effective paymaster - to the ESM, parliament was essentially exposing Germany's public finances to unlimited risks should one eurozone country after another topple under the debt crisis, they argued.