Sentences with phrase «unlimited risk»

For example, if you have a short position, you are at unlimited risk of the position going up in value.

A short stock position theoretically has unlimited risk since the stock price has no capped upside.

Option sellers assume nearly unlimited risk in exchange for the premium received.

No one wants to go back to the «old days» of unlimited risk justified somehow by the thought that home prices always rise.

A short stock position theoretically has unlimited risk since the stock price has no capped upside.

Buying options therefore exposes the trader to limited risk, compared to the virtually unlimited risk of going long or short on a stock.

However, a short call has limited profit potential in exchange for unlimited risk (if, for example, the underlying stock's price skyrockets)

Options should only be sold short when the probabilities are deeply in your favor that they will expire worthless, also a small hedge can pay for itself in the long run creating a credit spread instead of a naked option with unlimited risk exposure.

Federated Prudent Bear Fund regularly makes short sales of securities, which involves unlimited risk including the possibility that losses may exceed the original amount invested.

However, option selling involves theoretically unlimited risk which might endanger the performance of the option strategy in the long run should an option seller find himself at the wrong place, at the wrong time.

That is a lot different than say FOREX trading where you have virtually unlimited risk until you get to your stop level.

With CFDs, you have potentially unlimited risk.

Currencies are the world's largest market, with huge volume and opportunities, but also unlimited risk.

However, a VUL must be sold by a registered representative (one approved by FINRA) because there is unlimited upside as well as unlimited risk with the funds inside.

It is the opposite of an unlimited risk.

The writer has unlimited risk and a limited profit potential, which is the premium of the option minus commissions.

Risk lies if cocoa continues to decline because you only collect a certain amount of premium and the futures contract has unlimited risk the lower it goes.

To do this would require the suitable margin deposit for a Crude futures contract because you have unlimited risk, assuming the option is uncovered (naked).

If you are an uncovered seller of LEAPS ® calls, there is unlimited risk, or a seller of LEAPS ® puts, significant risk.

Keep in mind an investor who shorts the market outright would, in theory, have undefined and unlimited risk.

You risk a lot with any trade, but the short strangle has unlimited risk.

The traders, investors, and hedge funds that blew up generally made the error of having «all in» big bets that did not work out, letting an ego keep them on the wrong side of a trade, or went into a position without an exit strategy giving themselves unlimited risk.

Selling a naked put or call potentially has unlimited risk.

Bear in mind that most options expire worthless, leveraged ETFs lose value over time and opening yourself up to unlimited risk can be catastrophic.

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.

This is the «unlimited risk» mentioned in disclaimers.

Chambers said those policies are expensive and difficult to price because there are unlimited risks for the insurance company.