TRADING GLOSSARY
Value at risk
Value at risk, or VaR, estimates a loss threshold over a specified period at a chosen confidence level. It does not describe the largest possible loss or how severe losses beyond that threshold could be, and its accuracy depends on the model and data.
EXAMPLE
A hypothetical one-day VaR of $200 at 95% confidence means the model assigns a 5% probability to a daily loss exceeding $200.
RELATED TERMS
Full glossary A–Z →Put the theory into practice.
Open an account in minutes, or practise on a free demo first.
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