Derivatives & Risk

What is Value at Risk (VaR)?

Value at Risk (VaR) is a statistical estimate of the most a portfolio could lose over a set period at a given confidence level, under normal market conditions. For example, a one-day VaR of 5 percent at 95 percent confidence suggests losses should stay within 5 percent on 95 of 100 typical days. It does not describe the size of losses in the remaining 5 percent, and it relies on assumptions that can break in extreme events. VaR is a risk-measurement tool, not a ceiling on possible loss.

Crypto investments are subject to market risk and volatility. Past performance is not indicative of future returns. This is general information, not investment advice — consider your own circumstances or consult a qualified adviser before investing.