29 - Credit Received as a Proxy for Risk

Sep 12, 2021

This podcast explores credit as a measure of risk in trading, discussing stop loss as a loss control mechanism and the correlation between credit received and potential loss. It explains the relationship between credit received and risk, introduces the concept of value at risk, and provides examples of calculating credit and target returns. The significance of factoring in potential losses and the use of credit received as a risk proxy are also emphasized.

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Introduction

00:00 • 3min

The Credit Received as a Proxy for Risk

02:58 • 4min

Exploring the Relationship between Credit Received and Risk

07:08 • 2min

Sizing Trades Based on Target Returns and Premium Capture Rates

09:25 • 3min

Consideration of Potential Loss and Credit as a Proxy for Risk

12:18 • 3min