TRADING GLOSSARY
Concentration risk
Concentration risk arises when a large share of exposure depends on one asset, sector, currency, counterparty, or common market driver. Positions that appear separate can still create concentration if they tend to react similarly to the same events.
EXAMPLE
In a hypothetical portfolio, several currency positions all benefit from a stronger US dollar. A dollar decline therefore causes losses across those positions together.
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Risk warning: CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. You should consider whether you understand how CFDs work and whether you can afford to take the high risk of losing your money. Glossary definitions are general education only and are not investment advice. Risk disclosure