This concept is quite broad and applies to many types of financial activities; We in the Project are interested in it in relation to the stock market.

Risk, in the stock market, is a possible unforeseen and undesirable for you ("against you") change in the price of shares, leading (could lead) to your loss of money. We consider this definition to be absolutely exhaustive. Financial risk can be divided into “market” and “non-market”.

Non-market risk exists, first of all, due to the possibility of changes in legal norms and conditions, for example decisions of the market regulator; when you concentrate on buying individual shares rather than a fairly broad stock set; due to possible dishonest actions of bidders, etc. Non-market risk can be insured, and in some cases such insurance is mandatory.

Market risk is a possible change in the price of shares “against you,” usually directly during trading, as a result of the influence on the price of various factors such as “demand” and “supply,” published macroeconomic data, various news, and much more.

And how to count them? 

To determine the amount of financial risk in the stock market, you can use one of the methods - the cost measure of risk Value at Risk, abbreviated VaR. This is a calculation of the maximum amount of loss expressed in monetary units; sometimes as a percentage. For those interested in details, this topic is well covered in the book “The Mathematics of Money Management” by Ralph Vince. We recommend you study it. 

Risk can and should be managed. This is why there is risk management in the stock market. But as part of the Project, we do not discuss this. We also do not publish components G/M groups, their 3S Index and any management. These issues are discussed individually - there is a “Message to Us” button for this.