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Published On: Thu, Apr 4th, 2013

Risk

Risk in trading is the probability that an investment will lose money.

While high-risk investments can sound intimidating for beginning investors, they can reap very high rewards for the knowledgeable and experienced trader. One of the most popular risk indicators is the beta of a stock, which measures the stock’s volatility in comparison to the rest of the market. The market beta is defined as 1.0, so high-beta stocks are riskier but have potentially higher returns, while low-beta stocks are safer but have less return potential.

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About the Author

- Marcus Holland has been trading the financial markets since 2007 with a particular focus on soft commodities. He graduated in 2004 from the University of Plymouth with a BA (Hons) in Business and Finance.

 

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