Options Glossary

Description: Options Glossary, Risk, Downside Risk,Low Risk Investing,Perceived Risk,Risk Profile,Risk Manager,Risk Graph,Risk Arbitrage,Reward-Risk Ratio,Pin risk

Risk

The potential financial loss inherent in the investment.

See Also:

Downside Risk: The potential risk one takes if prices decrease in directional trading.

Low Risk Investing: A trade which is hedged for purposes of limiting price loss as opposed to a directional trade where loss is unlimited.

Perceived Risk: The theoretical risk of a trade in a specific time frame.

Risk Profile: A graphic determination of risk on a trade. This would include the profit and loss of a trade at any given point for any given time frame.

Risk Manager: A person who manages risk of trades in a portfolio by hedging their trades.

Risk Graph: A graphic representation of risk and reward on a given trade as prices change.

Risk Arbitrage: A form of arbitrage that has some risk associated with it. Commonly refers to potential takeover situations where the arbitrageur buys the stock of the company about to be taken over and sells the stock of the company that is effecting the takeover.

Risk Arbitrage: A form of arbitrage that has some risk associated with it. Commonly refers to potential takeover situations where the arbitrageur buys the stock of the company about to be taken over and sells the stock of the company that is effecting the takeover.

Pin risk: The risk to an investor (option writer) that the stock price will exactly equal the strike price of a written option at expiration; i.e., that option will be exactly at the money. The investor will not know how many of his/her written (short) options he/she will be assigned. The risk is that on the following Monday he/she might have an unexpected long (in the case of a written put) or short (in the case of a written call) stock position, and thus be subject to the risk of an adverse price move.

ETFs Glossary: Exchange Traded Funds -|-|- Amex Etfs -|-|- Nasdaq Etfs -|-|- NYSE Etfs -|-|- LSE ETFs -|-|- Canadian Etfs

Labels: options glossary, risk, downside risk,low risk investing,perceived risk,risk profile,risk manager,risk graph,risk arbitrage,reward-risk ratio,pin risk, stocks options trading, stock trading, stock options, stock, technical analysis, advanced technical analysis, options trading system, stock trading system, qqqq, qqqq stock, qqqq trading, trader, options trader, options, qqqq options, call options

 

Trading System - Signals - Options Tutorial - Index Trading - Technical Analysis - Glossary - ETFs - Quotes