Assertion: straddle's risk | /r/HasProperty | unlimited
Facets:
value: virtually
type: MANNER
value: potentially
type: DEGREE
value: theoretically
type: DEGREE
value: in case of short straddles
type: OTHER
value: either up
type: DEGREE
Source sentences:
text: The Short Straddle Has Unlimited Risk
text: The Long Straddle Has Limited Risk
text: The profit potential is unlimited, while the risk is limited to the amount paid to enter this trade type.
text: The trade has a limited risk (which is the debit paid for the trade) and unlimited profit potential.
text: Unfortunately, the short straddle has unlimited risk.
text: Risk: Unlimited
text: The risk is limited by the total premium paid for the options, as opposed to the short straddle where the risk is virtually unlimited.
text: The risk is virtually unlimited as large moves of the underlying security's price either up or down will cause losses proportional to the magnitude of the price move.
text: The maximum risk is unlimited.
text: The upside risk is unlimited in case of short straddles, if stock prices begin to rise exponentially, and there is also significant downside risk if stock prices fall fast, as they can fall right up to zero.
text: The maximum risk is unlimited.
text: The risk of a short straddle play is theoretically unlimited as a large trend in the underlier price whether up or down will create a large loss.
text: The risk for the option trader of a short straddle play is potentially unlimited due to having no hedges in place while being short both sides of the market with both a call and a put, of course a stop can be used to buy to close and stop losses if the market goes against one of your positions.
text: Plus, the risk of a short straddle is unlimited — the further the instrument’s price moves from the strike price, the larger the loss.
text: But the risk is virtually unlimited because, in a worst-case scenario, they would be responsible for honoring the options trade if the buyer exercises the option.
text: The maximum risk is unlimited.
text: The maximum risk is unlimited.
text: Shorting an option is selling that option, but the profits of the sale are limited to the premium of the option - and, the risk is unlimited.
text: When selling a straddle, risk is unlimited.
text: Since a straddle can never be worth less than zero, long straddles have limited risk and unlimited profit potential.
text: The long strangle ensures that the downside risk is limited.
text: This strategy is established for a net debit, and both the profit potential and risk are limited.