The risk of financial loss due to adverse movements in market prices of securities, currencies, commodities, or other financial instruments. Unlike credit risk, market risk affects all participants regardless of individual creditworthiness.
From Latin 'mercatus' (marketplace) and Old English 'risc' (danger). The concept formalized during the 1970s as financial markets became more volatile following the end of the Bretton Woods system and oil crises.
Market risk is the great equalizer - it doesn't matter if you're Warren Buffett or a college student, when the whole stock market crashes, almost everyone loses money together. It's systematic risk that can't be diversified away, unlike the specific risk of one company going bankrupt!
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