Value at riskValue at risk (VaR) is a measure of the risk of loss of investment/capital. It estimates how much a set of investments might lose (with a given probability), given normal market conditions, in a set time period such as a day. VaR is typically used by firms and regulators in the financial industry to gauge the amount of assets needed to cover possible losses.
Financial marketGeneric term for all markets in which trading takes place with capital Part of a series onFinancial markets Public market Exchange · Securities Bond market Bond valuation Corporate bond Fixed income Government bond High-yield debt Municipal bond Securitization Stock market Common stock Growth stock Preferred stock Registered share Shareholder Stock Stockbroker Stock certificate Stock exchange Watered stock Other markets Derivatives (Credit derivativeFutures exchangeHybrid security) Foreign exchange (CurrencyExchange rate) Commodity ETF Money Mutual fund Option Real estate Reinsurance Structured product Swap (finance) Alternative investment Private equity Private credit Leveraged buyout Venture Growth Secondaries SPAC Carried interest Leveraged finance Over-the-counter (off-exchange) ForwardsOptions Spot marketSwaps Trading Participants Regulation Clearing Related areas Asset management Banks and banking Bulls and Bears Diversification ESG Climate finance Eco-investing Impact investing Sustainable finance Greenwashing Financial technology Investment management Market risk Market trend Speculative attack vte Part of a series on financial servicesBanking Types of banks Advising Banq Bulge bracket Central Commercial Community development Cooperative Credit union Custodian Depository Development Direct Export credit agency Investment Industrial Merchant Middle market Money center Mutual savings Neobank Offshore Participation Payments Postal savings Private Public Retail Savings Savings and loan Universal Wholesale Bank holding company Lists of banks Accounts · Cards Accounts Christmas club Deposit Interest rate Money-market Savings Time deposit (Bond) Transaction (checking / current) Cards ATM Credit Debit Prepaid Funds transfer Cheque Card Electronic Bill payment Instant payment Mobile Wire RTGS NS Direct debit ACH Giro SWIFT Correspondent account CLS CIPS SPFS BRICS PAY Terms Asset allocation management Automated teller machine Bad debt Bank rate List Bank regulation Debanking Bank secrecy Asset growth Capital asset Cash Climate finance Corporate finance Disinvestment Diversification (finance) Eco-investing Economic bubble Economic expansion Enterprise value Enterprise risk management Environmental finance ESG Ethical banking Financial analysis analyst asset economics engineering forecast plan planner services Fractional-reserve banking Full-reserve banking Fundamental analysis Growth investing Hedge (finance) Impact investing Investment advisory Investment management Loan Mathematical finance Mobile banking Money creation Pension fund Private banking Relationship banking Sustainability Sustainable finance Speculation Statistical finance Strategic financial management Stress test (financial) Structured finance Structured product Toxic asset Related topics Asset pricing Bond (finance) Capital structure Corporate finance Cost of capital Equity (finance) Ethical banking Exchange-traded fund Financial law market participants regulation risk system History of banking List of banks Market risk Personal finance Public finance Security (finance) Shares Sustainable Development Goals Systematic risk Systemic risk Time value of money Too big to fail Too connected to fail Watered stock Category Commons Portalvte Part of a series onCapitalism Concepts Austerity Business cycle Capital Capital accumulation Capital markets Company Corporation Competition law Definitions Economic interventionism Economic liberalism Economic liberalization Economic surplus Entrepreneurship Fictitious capital Financial market Fiscal conservatism Free price system Free market Goods and services Investor Invisible hand Visible hand Marginalism Private property Privatization Profit Rent seeking Supply and demand Surplus value Tariff Value Wage labour Systems Anglo-Saxon Authoritarian Corporate Dirigist Free-market Humanistic Laissez-faire Liberal Libertarian Market Mercantilist Mixed Monopoly National Neoliberal Nordic Raw Regulated market Regulatory Rhine Social Political State State-sponsored Welfare Theories American Austrian Chartalism MMT Chicago Classical Institutional Keynesian Neo- New Post- Market monetarism Critique of political economy Critique of work Marxist Monetarist Neoclassical New institutional Supply-side Ideologies Anarcho Authoritarian Classical liberalism Democratic Dirigisme Eco Gladstonian Humanistic Inclusive Liberal Liberalism Libertarian Nationalist Neo Neoliberalism Objectivism Ordoliberalism Privatism Third Way Intellectuals Petty Cantillon Smith Bentham Malthus Say Ricardo Mill Hamilton Bastiat Marshall Pareto Bawerk Weber von Mises Schumpeter Keynes Hayek Rand Coase Stigler Friedman Buchanan Rothbard Sowell Becker Lucas Laffer Block Hoppe Origins Age of Enlightenment Capitalism and Islam Commercial Revolution Feudalism Industrial Revolution Mercantilism Merchant capitalism Primitive accumulation Physiocracy Simple commodity production Development Advanced Consumer Community Corporate Crony Finance Global Illiberal Late Marxist Merchant Progressive Rentier State monopoly Technological Related Anti-capitalism Capitalism in Singapore Capitalist propaganda Capitalist realism Capitalist state Consumerism Crisis theory Criticism of capitalism Critique of political economy Critique of work Cronyism Culture of capitalism Evergreening Exploitation of labour Globalization History History of theory Market economy Periodizations of capitalism Perspectives on capitalism Post-capitalism Speculation Spontaneous order Venture philanthropy Wage slavery Capitalism portal Economics portalvte A financial market is a marketplace where the pricing and trade of securities, commodities, currency, derivatives, or other financial products takes place.
Market impactIn financial markets, market impact is the effect that a market participant has when it buys or sells an asset. It is the extent to which the buying or selling moves the price against the buyer or seller, i.e., upward when buying and downward when selling. It is closely related to market liquidity; in many cases the terms are synonymous.
Market (economics)In economics, a market is any structure that allows buyers and sellers to exchange goods, services and information. The exchange of goods or services, either with money or without it, is a transaction. In free market economies, they are the process by which prices and allocations of goods and services are established. Markets facilitate trade and enable the distribution and allocation of resources in a society by allowing tradeable items to be evaluated and priced.
AssetIn financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent the value of ownership that can be converted into cash (although cash itself is also considered an asset). The balance sheet of a firm records the monetary value of the assets owned by that firm.
Financial assetA financial asset is a non-physical asset whose value is derived from a contractual claim, such as bank deposits, bonds, and participations in companies' share capital. Financial assets are usually more liquid than tangible assets, such as commodities or real estate.Credit ratingA credit rating is an evaluation of the credit risk of a prospective debtor (an individual, a business, company or a government). It is the practice of predicting or forecasting the ability of a supposed debtor to pay back the debt or default.
Margin CallMargin Call is a 2011 American drama film written and directed by J. C. Chandor in his directorial debut. The story takes place over 24 hours at a large Wall Streetinvestment bank during the initial stages of the 2008 financial crisis. It focuses on the actions taken by a group of employees during the crisis.
PartyA party is a gathering of people who have been invited by a host for the purposes of socializing, conversation, recreation, or as part of a festival or other commemoration or celebration of a special occasion. A party will often feature food and beverages, and generally conversation, music, dancing, or other forms of entertainment. Some parties take place in honor of a specific person, day, or event, such as a birthday party, a Super Bowl party, or a St. Patrick's Day party.CounterpartyA counterparty (sometimes contraparty) is a legal entity, unincorporated entity, or collection of entities to which an exposure of financial risk may exist. The word became widely used in the 1980s, particularly at the time of the Basel I deliberations in 1988. Well-drafted contracts usually attempt to spell out in explicit detail what each counterparty's rights and obligations are in every conceivable circumstance, though there are limits.
Security (finance)A security is a tradable financial asset. The term commonly refers to any form of financial instrument, but its legal definition varies by jurisdiction. In some countries and languages people commonly use the term "security" to refer to any form of financial instrument, even though the underlying legal and regulatory regime may not have such a broad definition.
LiquidityLook up in Wiktionary, the free dictionary.Financial riskFinancial risk is any of various types of risk associated with financing, including financial transactions that include company loans in risk of default. Often it is understood to include only downside risk, meaning the potential for financial loss and uncertainty about its extent. Modern portfolio theory initiated by Harry Markowitz in 1952 under his thesis titled "Portfolio Selection" is the discipline and study which pertains to managing market and financial risk.*As an Amazon Associate I earn from qualifying purchases.