Aggregate Risk

This is a measure of an investor’s total market exposure to spot and futures market contracts. Such investors would include banks, major corporations, hedge funds and other financial institutions. The definition for the Forex market is the exposure of a trading entity to fluctuations in the exchange rates of two currencies. Aggregate risk is a key indicator that a trading entity must employ in order to gauge the maximum allowable exposure to a a trade before engaging in that trade. Once this has been derived, limits on the position can be set. Larger corporations such as the ‘too big to fail’ banks have larger aggregate risk limits than smaller firms with lower credit ratings.

By |2018-09-04T14:07:48+00:00September 4th, 2018|0 Comments

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