Sentences with phrase «unlimited potential loss»

For example, if you write an uncovered call, you face unlimited potential loss, since there is no cap on how high a stock price can rise.

Not exact matches

A call option, he explained, is a type of financial contract that allows an investor to make deals that have limited potential for loss but unlimited potential for gain.

Similarly, short selling typically requires approval as there is a potential for unlimited losses.

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

Essentially, if the stock goes up, you have unlimited profit potential (less the cost of the put options), and if the stock goes down, the put goes up in value to offset losses on the stock.

ASBMB's report, Unlimited Potential, Vanishing Opportunity, collected anonymous statements from respondents regarding the risk of job loss as a result of diminished science funding.

The state offered unlimited upside while shielding teachers from any potential losses.

So your potential losses could be substantial, even unlimited.

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.

Here's the rub: you have unlimited loss potential.

A stop - loss order should be entered at $ 59 to protect against a change in the trend and the potential for theoretically unlimited losses.

The con is that your potential loss is unlimited as well.

If the stock price increases over the exercise price by more than the amount of the premium, the short will lose money, with the potential loss unlimited.

The main pros and cons of variable universal life are that since you have the benefit of potential unlimited gains, you also bear the risk of potential unlimited loss.

Risks associated with derivatives (including «short» derivatives) include losses caused by unexpected market movements (which are potentially unlimited), imperfect correlation between the price of the derivative and the price of the underlying asset, increased investment exposure (which may be considered leverage), the potential inability to terminate or sell derivatives positions, the potential need to sell securities at disadvantageous times to meet margin or segregation requirements, the potential inability to recover margin or other amounts deposited from a counterparty, and the potential failure of the other party to the instrument to meet its obligations.

The potential for loss to the option seller may be unlimited.

A futures contract carries unlimited profit and loss potential whereas the buyer of a Call or Put Option's loss is limited, but the profit potential is unlimited.

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!)

Call options have unlimited upside potential and losses are limited to the purchase price of the option.

Short sales that are not made «against - the - box» theoretically involve unlimited loss potential since the market price of securities sold short may continuously increase.

Potential losses from swaps are unlimited.

In fact, the potential for loss is unlimited — you can lose everything you invested and more.

The profit is limited to the premiums of the put and call, but the potential losses are virtually unlimited depending on price variation in any direction.

Depending on the terms and conditions of your agreement with the CFD provider, the potential losses are unlimited.

For the writer, the potential loss is unlimited unless the contract is covered, meaning that the writer already owns the security underlying the option.

Variable life sub-accounts are direct investments and subsequently offer unlimited potential for both gains and losses.

You have the potential for unlimited gains and losses depending on how your underlying investment options perform.

The con is that your potential loss is unlimited as well.