Home » Exposure

Exposure

« Back to Glossary Index

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

  1. The total market value of your trades at open.
  2. The total amount of possible risk at any given point.
  3. The portion of your portfolio invested in a particular market or asset.

In stock trading, your exposure would be equal to the total amount you had spent on open positions.

For example, if you bought $500 of Apple, then the total amount you can lose on your trade is $500 if Apple’s stock price goes to zero.

Leveraged trading works differently. Your exposure can be amplified considerably beyond your initial outlay, known as your margin.

For example, some trades will only require a 10% margin. This means that you’ll be exposed 90% beyond the amount you deposit.

In these cases, profit can be multiplied but losses can exceed initial deposits.

Finally, market exposure can refer to the portion of a fund or portfolio that is invested in a particular sector or asset.

For example, a $100,000 portfolio that has $5000 invested in bitcoin would have 5% market exposure to bitcoin.

Related
Parabolic

Parabolic describes a market that moves a great distance in a very short period of time, frequently moving in an accelerating Read more

Bitcoin Block

Blocks are data structures within the blockchain database, where transaction data in a cryptocurrency blockchain are permanently recorded. A block records Read more

Monetary Policy

Monetary policy refers to the actions taken by a nation’s central bank to influence the availability and cost of money and credit to Read more

XM Bonus