A margin call occurs when the value of an investor's open positions drops below the required deposit level, prompting a broker to request additional funds. If unmet, positions might be closed, leading to potential losses. Minimizing such risks involves strategies like risk management, adjusting position sizes, diversification, market monitoring, hedging, and maintaining adequate capital.
Risk models assist investors in assessing potential losses from investment decisions, based on historical data or expert opinions. In the context of the HUPX energy market, they help predict price volatility and evaluate credit or operational risks, supporting effective investment strategies.
The article is a continuation of a series of texts analyzing risks and opportunities in the energy market. In this part, we focus on cognitive errors that can affect the decisions of investors and managers. The article presents various types of cognitive errors, such as overconfidence and anchoring effect, and explains how they can impact risk assessments as well as buying and selling decisions in the energy market.
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