Trading risk refers to the potential for financial loss resulting from the buying and selling of financial instruments such as stocks, bonds, commodities, or currencies. It encompasses various types of risk, including: 1. **Market Risk:** The risk that the market value of an investment will decrease due to factors such as economic downturns, geopolitical events, or changes in interest rates. 2. **Liquidity Risk:** The risk of not being able to buy or sell an investment quickly at a fair price, potentially leading to losses or missed opportunities. 3. **Credit Risk:** The risk of loss due to the failure of a counterparty to fulfill their financial obligations, such as defaulting on a loan or bond repayment. 4. **Operational Risk:** The risk of loss resulting from inadequate or failed internal processes, systems, or external events, including fraud, errors, or disruptions. 5. **Systemic Risk:** The risk of widespread financial instability or market collapse, often caused by interconnect
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