CHAPTER 13
What Are the Risks?
This chapter gives an overview of the different risks that traders take. These are generally broken down into market risk, credit risk, liquidity risk, funding risk and the often forgotten operational risk and reputational risk. They can mean different things in different banks but, broadly speaking, these are the big ones. However, a trader generally focuses on market risk, that is the risk that the price of what he owns will move in the market unless he is trading a credit product, in which case he will also focus on credit risk. He rarely considers the other risks, unfortunately. This chapter will use each of the three trades from Chapter 4 and walk through the key risks in each. This chapter will also answer ...
Get How the Trading Floor Really Works now with the O’Reilly learning platform.
O’Reilly members experience books, live events, courses curated by job role, and more from O’Reilly and nearly 200 top publishers.
