Skip to content

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money.

No results found

View more search results

1 2 3 4 5 6 7 8 9 10
Related search: Market Data
Market Data Type of market
See all Market data search results >

Overexposure definition

What is overexposure in trading?

Overexposure in trading is the term used to describe the mistake of taking on too much risk. Typically, it’s when a trader makes the technical blunder of investing too much capital in a single position or market.

Learn how to manage your risk

Take control of your risk with a range of tools and educational resources.

Learn more

Overexposure explained

While the right amount of exposure offers the chance for greater profit from a position, overexposing your capital comes at a huge risk.

Overexposure can happen for multiple reasons.

Firstly, when a trader believes that a position offers high profit potential, they might subsequently put too much money into that opportunity.

And secondly, if a trader has too many positions open in the same market or industry, they can be considered overexposed. So, by balancing their portfolio across positions, markets and industries, traders can avoid this risk.

All trading involves risk but being overexposed can end up increasing the likelihood of taking on significant losses – even if you have risk management measures in place. To avoid overexposure, it is important to take the time to navigate your chosen market and don’t fall into the trap of putting all your eggs in one basket.

Example of overexposure

Let’s assume your trading portfolio is worth $100,000, and you decide to invest in commodities and forex – investing 25% in copper, 25% in gold and 50% in USD/GBP.

Despite the same amount of capital being invested in each asset class, you would be extremely overexposed in the forex market. This is because the extreme market volatility associated with forex trading creates a higher level of risk.

A - B - C - D - E - F - G - H - I - L - M - N - O - P - Q - R - S - T - U - V - W - Y

See all glossary trading terms

Learn more

Help and support

Get answers about your account or our services.

Get answers

Call 010 500 8626

Or ask about opening an account on 010 500 8624 or newaccounts.za@ig.com.

We're here 24hrs a day from 9am Saturday to 11pm Friday.

Markets

Forex

Indices

Shares

Other Markets

CFD trading

International account

Premium services

Trading platforms

Trading apps

MetaTrader 4

ProRealTime

Compare features

Try our demo

IG analysis

News and analysis

Weekly reports

Contact us

Interested in opening an account?

Contact 010 500 8624 or

newaccounts.za@ig.com

Want to check on your application's progress? Email

newaccounts.za@ig.com

Clients: Help and support

IG | Sitemap | Terms and agreements| FAIS | Privacy | IG Community | About IG | Cookies

Follow us online:

CFDs are complex instruments and come with a high risk of losing money rapidly due to leverage. 69% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs work, and whether you can afford to take the high risk of losing your money. Clients can lose more than they deposit. All trading involves risk.

IG is a trading name of IG Markets Ltd and IG Markets South Africa Limited. International accounts are offered by IG Markets Limited in the UK (FCA Number 195355), a juristic representative of IG Markets South Africa Limited (FSP No 41393). South African residents are required to obtain the necessary tax clearance certificates in order to utilise their foreign investment allowance should the South African resident wish to open an offshore account with IG Markets Limited.

IG provides execution only services and enters into principal to principal transactions with its clients on IG’s prices. Such trades are not on exchange. IG Markets South Africa Limited is an authorised financial services provider (FSP No 41393). Whilst IG Markets South Africa Limited is a regulated FSP, CFDs issued by IG are not regulated by the FAIS Act as they are undertaken on a principal-to-principal basis.

IG Markets South Africa Limited is an authorised over-the-counter derivative provider and is regulated by the Financial Sector Conduct Authority.

The information on this site is not directed at residents of the United States or Belgium or any particular country outside South Africa and is not intended for distribution to, or use by, any person in any country or jurisdiction where such distribution or use would be contrary to local law or regulation.

Voted SA’s top CFD provider in Business Day Investors Monthly Annual Stockbroker Awards in 2012, best platform for Active Day Traders in 2013 and 2014, SA's best Online Broker in 2015 and 2017 and SA's best CFD provider in 2020 as well as SA's Top CFD Broker in 2021.

© 2003 - 2023

IG Group | Careers| Marketing partnership