Risk Terms

Volatility Risk

Definition

What is Volatility Risk?

The risk that changes in market volatility harm an investment or strategy.

Example in practice

An option seller loses when implied volatility jumps.

Keep learning

The possibility of loss because broad market prices or rates move against an investment.

The possibility that a borrower or issuer will fail to make promised payments or suffer a downgrade.

The possibility that changing market interest rates will reduce an investment's value or income appeal.

A day on which relevant financial institutions and markets are open for normal processing.

Think you know your investing terms?

Put your knowledge to the test with a quick quiz.