Limited Risk
The risk of an investment that has a predetermined maximum downside potential, which is usually the initial amount invested. Investopedia Says:
When choosing a limited-risk investment, the investor is fully aware of the potential amount he or she could lose. For example, entering into a long position in a stock has limited risk because the investor can lose no more than the initial amount invested. Similarly, option contracts have limited risk as only the initial premium paid for the option can be lost. Related Terms:
Beta
Eat Well, Sleep Well
Long Position
Return
Risk
Risk Capital
Risk/Return Trade-off
Systematic risk
Unsystematic Risk |