downside risk

Definition

The likelihood that a security or other investment will decline in price, or the amount of loss that could result from that potential decline.

Use downside risk in a sentence

You need to always know what the downside risk might be and do your best to avoid reaching it if you can.

​ Was this Helpful? YES  NO 10 people found this helpful.

My policy is to put trailing sell orders on the stocks within my portfolio to limit the downside risk and protect profits earned to date.

​ Was this Helpful? YES  NO 7 people found this helpful.

There was some slight downside risk, but on the whole the play seemed like a solid one, so we went ahead and pulled the trigger on the deal.

​ Was this Helpful? YES  NO 10 people found this helpful.

Show more usage examples...

Browse Definitions by Letter: # 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
calmar ratio 2% rule