Credit risk:

the risk arises from the likelihood of a company or a government to default on its debt. The treated product is similar to an insurance that protects the buyer of a possible defect, that is to say an event that would make the enterprise or the state would be unable to honor its debt. The trader gives a price for this insurance based on risk.

Interest rate risk or “fixed income”:

the risk arises from movements in interest rates, which are decided by central banks. If you borrow at 5% today to a year and suddenly the central bank decides to lower its rate to 4% per year, you can re-lend money at 4%. You will lose money. This is the second largest market in the world in terms of volume. It is the most technical market, mathematically speaking and where engineers are needed.

The equity risk:

it’s the best known risk. It is related to business activities. This is a small market compared to the debt market. Nominal exchanges of one million dollars is the norm.

Foreign exchange risk (FX):

This is the risk associated with exchange rates. This is the largest market in the world with a daily volume of 2,000 billion, increasing steadily.

The risk of raw materials:

small market compared to foreign exchange and debt, but also growing: it is linked to commodity prices. Horizontally, the room is divided into four main branches that separate the functions between traders.

The “market maker”:

he works on basic products such as spot (currency) the “cash action”, government bonds etc.. The market maker is simply responding to customers by quoting prices in both directions, a price he is willing to buy and another price he is willing to sell. The positions he holds are the result of deals he makes, and must always cover these positions, while trying to make a profit. But the market maker is not supposed to speculate. It must respect strict position limits. In most cases, young recruits start with a position of market maker, which enables them to understand the market by taking small risk.

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