Free Lunch

Filed Under » ,
Dictionary Says

Definition of 'Free Lunch'

A situation in which a good or service is received at no cost, with the true cost of the good or service ultimately borne by some party, which may even include the recipient. A "free lunch" was often offered during the 1800s to bar patrons who ordered drinks as a way of bringing in more business, though in modern times the term is used to describe anything purportedly received for free. From this, "free lunch" became an investment slang term referring to unlimited riskless profits.

Investopedia Says

Investopedia explains 'Free Lunch'

The phrase "there's no such thing as a free lunch" is commonly used to describe situations in which investors are not able to consistently make large profits without bearing the risk of a potential loss.

For example, a free breakfast offered by a hotel to entice consumers to stay the night is not free, as the hotel room is still being paid for. Likewise, while investors can continue to make money in a bull market, there is an underlying cost - risk.

Articles Of Interest

  1.

    Winning The Jackpot: Dream Or Financial Nightmare?

    Don't assume all prizes are free. Many come with enough costs to render them worthless.

  2. Standard Of Living Vs. Quality Of Life

    What is the difference between a standard of living and quality of life? Find out in this breakdown.

  3. Are We Losing The Middle Class?

    Find out where your income and lifestyle put you compared to the national average.

  4. Beginner Trading Fundamentals

  5. Arbitrage Squeezes Profit From Market Inefficiency

    This influential strategy capitalizes on the relationship between price and liquidity.

  6. A Day In The Life Of A Day Trader

    Day trading has many advantages and, while we often hear about these perks, it's important to realize that day trading is hard work.

  7. How To Start Trading

    Successful trading involves more than reading a few articles or books: you should plan on devoting a substantial amount of time and effort before ever placing a trade in a live market.

  8. Triple Screen Trading System - Part 2

    Market tide is the basis for making trading decisions in this three-part system.

  9. Invest Like A Pro

    By following the strategies of the pros, even a beginner can learn to invest like an expert.

  10. Can Regular Investors Beat The Market?

    With the big name competition out there, hard-working people who invest have a tough time beating the market.
comments powered by Disqus
Marketplace
Hot Definitions

  1. Yield Elbow

    The point on the yield curve indicating the year in which the economy's highest interest rates occur. The yield elbow is the peak of the yield curve, signifying where the highest interest rates occurred.

  2. Xenocurrency

    A currency that trades in markets outside of its domestic borders.

  3. Wanton Disregard

    A standard of severe negligence. Wanton disregard is a very serious accusation that indicates that a person behaved extremely recklessly.

  4. Ultra ETF

    A class of exchange-traded funds (ETF) that employs leverage in an effort to achieve double the return of a set benchmark.

  5. Toehold Purchase

    A purchase of less than 5% of a target company's outstanding stockmade by an acquiring company. A toehold purchase of just under 5%, while not a significant stake in a firm, allows the shareholders a "toe-holds" grip on the company and its decision making.

  6. Samurai Bond

    A yen-denominated bond issued in Tokyo by a non-Japanese company and subject to Japanese regulations.
Trading Center
http://sp.fastclick.net/ad/tr/10858-64082-15546-0?mpt=316adcb94a0179a9b2fcada43099751b