Investor Glossary-downsideInvestor Glossary-downsideInvestor Glossary-downsideInvestor Glossary-downsideInsightful 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

The HTML to link to this page
 

In business jargon, downside is the risk of unfavorable outcome to a particular activity. In an investment context, downside is generally understood to be the risk of price of decline, sometimes called downside risk. Sophisticated means of quantifying the downside to an investment portfolio have been constructed. For instance Value at Risk methodologies (VaR) compute a number that expresses the maximum amount a portfolio is likely to fall (a measure of downside) in a given period, subject to a certain confidence interval. Downside protection is the name given to any strategy for limiting the magnitude of downside. Having what is called a protective put on an owned stock is the classic example of downside protection. With a protective put, the shares can always be sold for at least the strike price of the put by exercising the option if the share price falls below the stroke price before the put's expiration date.



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


Accounting | Banking | Bonds | Brokers | Economy | Futures | Mutual Funds | Options | Real Estate | Retirement | Stocks | Taxes | Technical Analysis
Home | 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