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Opportunity Loss or Cost
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The value of a lost chance or a potential profit that was not realized because a course of action was taken that did not permit the investor to obtain that profit. The actual or expected cost of following one course of action measured relative to the most attractive alternative. Opportunity loss will not be reflected in an accounting statement. An example of an opportunity loss might be the $20 per share profit forgone by a covered call writer who sells a call with a $45 strike price for a $5 premium, only to see the underlying stock jump to $70 in response to a take-over bid.
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Glossary *
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