Investing Dictionary
Risk

What is Beta?

How much a stock moves compared to the overall market

Full Explanation

Beta of 1 = moves with the market. Beta of 2 = moves twice as much as the market. Beta of 0.5 = half as volatile as the market.

Pro Tip

High beta stocks are riskier but can outperform in bull markets.

Related Risk Terms

Leverage

Using borrowed money or financial instruments to amplify your investment

Margin

Borrowing money from your broker to buy more stocks

Position Sizing

Deciding how much of your money to put in one stock

Risk/Reward Ratio

Comparing how much you could lose vs. how much you could gain

View all Risk terms →

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