Investor Glossary-downside protectionInvestor Glossary-downside protectionInvestor Glossary-downside protectionInvestor Glossary-downside protectionInsightful stock market charts - Click here
investor
Categories    # A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Downside Protection

The HTML to link to this page
 

Downside protection is a cushion against the potential loss resulting from a price decline in a security or market. The challenge associated with downside protection is that downside protection needs to be balanced with upside potential for high returns. For this reason (among other more complicated ones), some investors do not believe in downside protection. Whether or not an investor should consider downside protection depends on several factors, such as how long before the money is needed and if there will be regular withdrawals during that time. The sooner one needs the money and the more often one plans to withdrawal, the more appealing downside protection can be. A common example of downside protection is having a put option on an owned stock.



Rate this downside protection definition...

Learn about investing with the Investor Glossary Term of the Day


Click here for insightful stock market charts. Where is the market headed? The answer may surprise you. Find out
with the exclusive & Barron's recommended charts of Chart of the Day.


Popular Terms: quality assurance, minority interest, command economy, Zero Cost Collar, APR, annual return, Key Rate Duration, average price per share, ex-dividend date, phantom income, risk management, in escrow, EBITDA, diluted share, option premium, cancelled check, covered put, required rate of return, labor relations, VIX, balance sheet, current ratio, LIBOR, real GDP, 401a, debt service coverage, 1031 exchange, margin rate, 144a, liquidity ratio, class C shares, wholly-owned subsidiary, deferred tax, irrevocable trust, 1035 exchange, stock market close, deferred revenue, implied volatility, reverse mortgage, retained earnings, dividends payable, inflation, stock split, open position, limit order, ex-dividend, FICO score, FTSE, per diem


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Investor Glossary | Term of the Day | Suggest a Term | Chart of the Day | Dogs of the Dow
©2004-2016 Investor Glossary - All rights reserved - Terms of Use