Market risk is the risk of losses in positions arising from movements in market prices. Some market risks include:
- Equity risk, the risk that stock or stock indexes (e.g. Euro Stoxx 50, etc. ) prices and/or their implied volatility will change.
- Interest rate risk, the risk that interest rates (e.g. Libor, Euribor, etc.) and/or their implied volatility will change.
- Currency risk, the risk that foreign exchange rates (e.g. EUR/USD, EUR/GBP, etc.) and/or their implied volatility will change.
- Commodity risk, the risk that commodity prices (e.g. corn, copper, crude oil, etc.) and/or their implied volatility will change.
Read more about Market Risk: Measuring The Potential Loss Amount Due To Market Risk, Use in Annual Reports of U.S. Corporations, Risk Management
Famous quotes containing the words market and/or risk:
“But the nomads were the terror of all those whom the soil or the advantages of the market had induced to build towns. Agriculture therefore was a religious injunction, because of the perils of the state from nomadism.”
—Ralph Waldo Emerson (1803–1882)
“A monarch must sometimes rule even himself: he who wants everything must risk very little.”
—Pierre Corneille (1606–1684)