What is total exposure?
Also known as: Portfolio exposure, Correlation risk
Definition
Total exposure is the combined size and risk of all open positions, including how closely they move together.
Five positions in altcoins that tend to move with Bitcoin behave like one large position. If Bitcoin drops, all five can hit their stops together.
Checking total exposure is step four of the Decision Protocol: look at the sum of risk across open positions, at correlation between them, and at liquidation distance on anything leveraged.
Related terms
General education only. Not financial advice.