The first, most obvious way to reduce risk in your long strategies is by reducing the number of dollars that stand between your entry price and $0. Take, for example, last week’s crash in metals.
Systematic risk is a term used to describe the probability of a broad-based market meltdown occurring. Although comprehensive market crashes are rare, traders and investors remain vigilant in limiting exposure to such events. This goal can be accomplished in a variety of ways, with the execution of futures and options hedging strategies being near the… Read more.