Sentences with phrase «unlimited losses when»

Not exact matches

But you're exposed to unlimited losses if markets crash — like they did when the Dow fell 2,400 points in a week last month.

When you short a stock, you have unlimited loss potential but can only double the amount of your original investment.

It's definitely not advisable to take an unhedged short position, either by borrowing someone else's share (s) to sell or selling an option (when you sell the option you take the risk), because of the unlimited loss potential described above.

When you short a stock your gain is limited to the selling price and your loss is unlimited

When you buy a stock your loss is limited to the purchase price and your gain is unlimited.

When you hold a position short your maximum loss is unlimited; there's no limit to how high the value of something can go.

Yes a good example of when someone takes a gamble on the direction of the stock, they could have gambled on going long or going short, the only difference the losses on going short are potentially unlimited.

While it does provide unlimited possibilities for profiting, it also involves a large amount of risk and as brokers typically warn almost everywhere when it comes to leveraged products, losses may exceed your deposited money.

When you sell short, the most you can make is 100 %, but your potential for loss is unlimited.

Consider that when buying stock (a.k.a. going long or taking a long position, in contrast to short) then your potential loss as a buyer is limited (i.e. stock goes to zero) and your potential gain unlimited (stock keeps going up, if you're lucky!)

The reason is that there are so many risks: government regulations of short - selling (SEC Rule 204), special government regulations put in place during market panics (e.g. the 2008 SEC ban on short selling financials), forced buy - ins, unlimited losses, debt to the brokerage, interest one is charged for being short which can vary arbitrarily, brokerages could change margin requirements to any arbitrary amount, arbitration clauses, you agree to indemnify the brokerage for anything it did even if it did the wrong thing, some brokerages also do market - making and thus have further incentive to fleece the client, and all the other «screw you» legal language that you agreed to when opening an account.

Traders should read The Option Disclosure Statement before trading options and should understand the risks in option trading, including the fact that any time an option is sold, there is an unlimited risk of loss, and when an option is purchased, the entire premium is at risk.

In addition, investors can lose only the amount that they invest, whereas when they short stocks, stock baskets or ETFs, their losses are theoretically unlimited.

When deciding on which travel insurance is right for you, it's best to go with a comprehensive plan that not only offers unlimited medical insurance, but also those extras like cover for flight delays / cancellations and loss of luggage.