Option/Volatility Risk Clause Samples

Option/Volatility Risk. Volatility risk is the risk of fluctuations in the value of an asset or liability over a relatively short period of time. The volatility risk present with respect to the Company’s portfolio is dependent in part on the composition and relative concentration of the types of investments in the portfolio. In addition, the volatility risk present with respect to the Company’s liabilities is dependent, in part, on the insurance products issued by the Company. Derivative transactions may be used by the Company to reduce the risk of concentration by the Company in any one type of investment (either directly or through the issuance of products tied to an investment), to diversify the Company’s holdings in a tax-efficient and cost-efficient manner and to compensate for fluctuations in the value of the Company’s assets and liabilities. Option risk refers to the risk of fluctuations in the value of options embedded in the Company’s investment portfolios or liabilities. The Company may use derivatives to hedge such risk exposures (commonly known as Delta, Gamma, ▇▇▇▇, Rho and Theta).
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Related to Option/Volatility Risk

  • Liquidity Risk Measurement Services Not Applicable.

  • Liquidity risk The Exchange requires all structured product issuers to appoint a liquidity provider for each individual issue. The role of liquidity providers is to provide two way quotes to facilitate trading of their products. In the event that a liquidity provider defaults or ceases to fulfill its role, investors may not be able to buy or sell the product until a new liquidity provider has been assigned.

  • Investment Risk Buyer understands that its investment in the securities constitutes high risk investment, its investment in the Securities involves a high degree of risk, including the risk of loss of the Buyer’s entire investment.

  • Market Risk 1.15.1 Market risk, or systematic risk, stems from the economic, geographical, political, social or other factors of the relevant market, and is affected by variables that are related to the entire market. For example, if one invests in a financial product listed in Hong Kong, this investment will be subject to the systematic risk related to the entire Hong Kong market. When any event affects the systematic risk of the market, all financial products will be impacted either in the form of a rise or fall in the prices. This will apply whether investors hold one single financial product or a diversified portfolio of financial products in that market. As long as they keep their holdings, they cannot avoid being exposed to the systematic risk of the market. You should be aware that market risk cannot be eliminated, no matter how they diversify their holdings. You should seek professional advice as you think appropriate or necessary to manage (but not eliminate) market risk, and you should be careful about investing too much into a single market.

  • Mileage Measurement Where required, the mileage measurement for LIS rate elements is determined in the same manner as the mileage measurement for V&H methodology as outlined in NECA Tariff No. 4.