Holding period risk

Holding period exposure. Let us assume a firm offers a contract with a given wholesale price plus an additional risk premium at a given time.

Holding period risk is a financial risk that a firm's sales quote giving a potential retail client a certain time to sign the offer for a commodity, will actually be a financial disadvantage for the offering firm since the market price's on the wholesale market has changed. The risk is usually reduced by a risk premium being added onto the wholesale price of a commodity by the offering firm.

An alternative and less general definition is: Holding period risk is the risk, while holding a bond, that a better opportunity will present itself that you may be unable to act upon.^[1]

References

↑ "Glossary: Holding period risk". Interactive Brokers LLC. Retrieved 2015-12-14.

Financial risk and financial risk management

Categories

Credit risk	Concentration risk Consumer credit risk Credit derivative Securitization

Market risk	Commodity risk (e.g. Volume risk, Basis risk, Shape risk, Holding period risk, Price area risk) Equity risk FX risk Margining risk Interest rate risk Volatility risk Liquidity risk (e.g. Refinancing risk)

Operational risk	Operational risk management Legal risk Political risk Reputational risk Valuation risk

Profit risk Settlement risk Systemic risk

Modeling

Market portfolio
Modern portfolio theory
RAROC
Risk-free rate
Risk parity
Sharpe ratio
Value-at-Risk (VaR) and extensions Profit at risk, Margin at risk, Liquidity at risk

Basic concepts

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