Reduce the level of risk from potential market volatility

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Reference no: EM133599418

Question: You soon rotate to another team. One of your first tasks is to make a trade in line with instructions your new manager gave you. A news update suggests increased volatility in the market. Increased volatility can result in higher gains from a trade, but also increases risk. Based on the scenario, which statement is most effective and least effective.

1. reduce the level of risk from potential market volatility by selling a portion of what you have.

2. Check with your manager what the best course of action would be in response to the news.

3. increase the size of the trade to the maximum within your limits, looking to make significant gains.

Reference no: EM133599418

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