In this article, We learn about "Exposure ".Let's Go!

In trading, Exposure is a general term that can mean three things:

  1. The total market capitalization of your opening trades.
  2. The total amount of risk that may exist at any given point.
  3. The portion of a portfolio invested in a specific market or asset.

In stock trading, your risk exposure will be equal to the total amount you spend on your open positions.

For example, if you purchased $500 of Apple stock, the total amount you could lose on the trade if Apple's stock price fell to zero would be $500.

Leveraged trading works differently.

Your exposure can significantly exceed your initial outlay (called profit).

For example, some trades require only 10% margin. This means you are at risk of exceeding 90% of the amount you deposit.

In these cases, profits can be multiplied, but losses can exceed the initial deposit.

Finally, market exposure can refer to the portion of a fund or portfolio invested in a specific industry or asset.

For example, a $100,000 portfolio with $5,000 invested in Bitcoin would have a market exposure of 5%.

If you want to learn more foreign exchange trading knowledge, please click: Trading Education.

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