The Risk Slide Tool: Be Your Own Risk Manager

E*TRADE Securities1

11/12/18

How to Use the E*TRADE Risk Slide Tool

When you put on your risk manager hat, there are two key questions you need to answer. First, what is the risk of your portfolio in the event of a significant market move, and what specific positions within your portfolio carry the most risk? The E*TRADE Risk Slide tool helps answer these questions.

1.      Log on to your E*TRADE account, hover over the “Trading” tab and select “OptionsHouse” from the dropdown choices.

2.      Select “Account” and “Risk Slide” to open the tool.

  • Please note: The Risk Slide tool is only available to E*TRADE customers who opt in to real-time market data. The tool is not currently available for all E*TRADE customers.

3.      A matrix of existing positions, organized by security, is displayed.

4.      Click “Total” to see your aggregate portfolio or select an individual security. You can exclude any position in your risk calculation by hovering over the symbol and unchecking the box.

  • The position is still visible in the grid, but is dimmed out to indicate that it is not currently evaluated as part of your total market risk.

5.      Turn the “Beta” indicator “On” to beta weight your portfolio.

  • Beta weighting can potentially help you better anticipate how individual securities may move if that major index moved by some defined percentage.
  • When you beta weight your portfolio, those changes will also be represented in the corresponding graph at the bottom of the Risk Slide.

6.      To make changes to market volatilities and see how your positions change, select “Volatility Change” at the top of the Risk Slide. Choose between “Absolute” or “Relative”, and input the number of points (positive or negative) by which you’d like to change your options and click “Apply”.

7.      You will see the change in the chart and as well as in the graph below.

By using the E*TRADE Risk Slide tool, you can see which positions are going to have the greatest effect on your holdings when the market moves and potentially help you prepare for those effects.