Widow Maker

AAA

DEFINITION of 'Widow Maker'

In everyday usage, a widow maker is the name of an artery with blockage that often causes death by severe heart attack, but in finance, a widow maker is an extremely risky investment that subjects the investor to very large potential losses. Futures in heating oil and gasoline are an example of a type of investment that can be subject to the moniker "widow maker."

INVESTOPEDIA EXPLAINS 'Widow Maker'

The wise investor will look at a highly speculative investment as a gambling venture and mitigate risk accordingly. Risk mitigation strategies might include investing only a small percentage of total assets in the speculative "investment" or implementing trading strategies that limit losses.

RELATED TERMS
  1. Crude Oil

    A naturally occurring, unrefined petroleum product composed of ...
  2. United States Natural Gas Fund ...

    An exchange-traded security designed to track percentage changes ...
  3. Speculation

    The act of trading in an asset, or conducting a financial transaction, ...
  4. Futures

    A financial contract obligating the buyer to purchase an asset ...
  5. Futures Contract

    A contractual agreement, generally made on the trading floor ...
  6. Exchange Traded Derivative

    A financial instrument whose value is based on the value of another ...
RELATED FAQS
  1. How can an investor make money from a decline in the electronics sector?

    Speculation methods, such as short selling, futures contracts and put options, offer investors a way to make money from a ... Read Full Answer >>
  2. How can an investor profit from a decline in the aerospace sector?

    Several forms of speculation enable investors to profit from a decline in the aerospace sector. Short selling aerospace stock ... Read Full Answer >>
  3. How can I profit from a decline in the drugs sector?

    Profit from a decline in the drugs sector by short selling or by purchasing futures contracts or put options. Investors use ... Read Full Answer >>
  4. What other precious metals are there beyond gold and silver?

    Besides gold and silver, the other precious metals are platinum, palladium, ruthenium, rhodium, osmium, rhenium, germanium, ... Read Full Answer >>
  5. What other options does an investor have to buying physical silver?

    A wide variety of investment options are available to traders wishing to invest in the silver market. Buying physical silver ... Read Full Answer >>
  6. How can I profit from a fall in the automotive sector?

    You can profit from a fall in the automotive sector by short selling automotive stocks and exchange-traded funds (ETFs) or ... Read Full Answer >>
Related Articles
  1. Mutual Funds & ETFs

    Modernize Your Portfolio With ETF Futures

    Gain access to premier, highly liquid ETFs with lower capital requirements.
  2. Options & Futures

    Market Speculators: More Help Than Harm

    Speculators often get a bad rap, but it's important to remember that they only observe trends, not manipulate them.
  3. Options & Futures

    Fueling Futures In The Energy Market

    The energy market influences every aspect of our lives, and these four options are its driving force.
  4. Options & Futures

    Interpreting Volume For The Futures Market

    Learn how to read the volume reports, look at the relation to liquidity and interpret volume using open interest.
  5. Investing Basics

    Explaining the Spot Rate

    The spot rate is the immediate purchase price posted on exchanges for purchasing commodities, currency and securities.
  6. Chart Advisor

    Bullish Traders Are Turning To Rare Earth Metals

    Companies that explore and or process rare metals are of specific interest to traders because of strong moves in a couple of the sector’s key players.
  7. Term

    Understand The Math Behind Betting Odds & Gambling

    A betting opportunity should be considered valuable if the probability assessed for an outcome is higher than the implied probability estimated by the bookmaker. Furthermore, the odds on display ...
  8. Mutual Funds & ETFs

    The Top 3 Silver ETFs

    Like any tradable asset, silver and silver ETF prices are governed by the fundamental market economic forces of supply and demand.
  9. Investing Basics

    Betting Basics: Fractional, Decimal & American Odds

    Betting odds are expressed in three popular formats: Fractional (British), Decimal (European) and American (Moneyline). So, if you are planning to enter the betting or the gambling world, it ...
  10. Active Trading Fundamentals

    Invest In Gold Through ETFs

    The mystique of the yellow metal captivates market players seeking hedges against inflationary pressure, safe haven in turbulent times and opportunities for speculative trading opportunities. ...

You May Also Like

Hot Definitions
  1. Fiduciary

    1. A person legally appointed and authorized to hold assets in trust for another person. The fiduciary manages the assets ...
  2. Expected Return

    The amount one would anticipate receiving on an investment that has various known or expected rates of return. For example, ...
  3. Carrying Value

    An accounting measure of value, where the value of an asset or a company is based on the figures in the company's balance ...
  4. Capital Account

    A national account that shows the net change in asset ownership for a nation. The capital account is the net result of public ...
  5. Brand Equity

    The value premium that a company realizes from a product with a recognizable name as compared to its generic equivalent. ...
Trading Center