Volatility risk is the risk of a change of price of a portfolio as a result of changes in the volatility of a risk factor. It usually applies to portfolios of derivatives instruments, where the volatility of its underlyings is a major influencer of prices.
Read more about Volatility Risk: Sensitivity To Volatility, Risk Management
Famous quotes containing the word risk:
“We saw the risk we took in doing good,
But dared not spare to do the best we could
Though harm should come of it”
—Robert Frost (1874–1963)