Financial Risk Management

Learn how to perform a Maximum Drawdown Calculation in Excel and understand its significance in portfolio risk analysis. In this video, we cover the Maximum Drawdown Meaning, step through the Maximum Drawdown Explained section, and demonstrate how to compute it using Maximum Drawdown Excel techniques. You’ll also see a Maximum Drawdown example with real-world data to help you apply this key risk metric to your own investments. Whether you’re a trader, investor, or finance professional, mastering Maximum Drawdown is essential for evaluating downside risk and protecting your portfolio. Maximum Drawdown is also known as Max Drawdown and is a downside risk measurement.

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Chapters:
0:00 – Maximum Drawdown Definition & Formula
0:39 – Maximum Drawdown Explained
1:47 – Maximum Drawdown Calculation in Excel
4:00 – Real World Example of Maximum Drawdown

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

This content is provided by a paid Influencer of Interactive Brokers. Influencer is not employed by, partnered with, or otherwise affiliated with Interactive Brokers in any additional fashion. This content represents the opinions of Influencer, which are not necessarily shared by Interactive Brokers. The experiences of the Influencer may not be representative of other customers, and nothing within this content is a guarantee of future performance or success.

None of the information contained herein constitutes a recommendation, promotion, offer, or solicitation of an offer by Interactive Brokers to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Investment involves risks. Investors should obtain their own independent financial advice and understand the risks associated with investment products and services before making investment decisions. Risk disclosure statements can be found on the Interactive Brokers website.

Interactive Brokers is a FINRA registered broker and SIPC member, as well as a National Futures Association registered Futures Commission Merchant. Interactive Brokers provides execution and clearing services to its customers. For more information regarding Interactive Brokers or any Interactive Brokers products or services referred to in this video, please visit www.interactivebrokers.com.

The projections or other information regarding the likelihood of various investment outcomes generated by the Tools mentioned in this video are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. It is important to understand that these projections are based on certain assumptions and models, and actual outcomes may differ significantly. Please note that results may vary over time.

Any trading symbols, entities or investment products displayed or named in this podcast are for illustrative purposes only and are not intended to portray recommendations.

Is margin trading & leverage a smart strategy, or is it just added risk? In this video, Ryan O’Connell, CFA, FRM, breaks down the real impact of margin trading on portfolio returns using a data-driven Excel analysis and Monte Carlo simulation. You’ll learn how margin works, leverage ratios, and margin interest rates affect investment growth—and whether the potential higher returns outweigh the risks.

We start by explaining the fundamentals of leverage and margin trading, followed by a step-by-step portfolio growth model comparing leveraged vs. non-leveraged strategies. I used Interactive Brokers’ margin rates for this analysis, but you can apply the same approach using Fidelity, Robinhood, or Binance margin rates as well.

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💾 *Download Free Excel File Here:* https://ryanoconnellfinance.com/product/margin-trading-return-simulator/

Chapters:
0:00 – What Is Leverage?
0:50 – Setting Expectations: Return & Risk
2:05 – Margin Trading Explained: How It Works & Costs
4:18 – Understanding Leverage Ratios & Their Impact
4:57 – Predicting Portfolio Growth With Margin Trading
9:22 – Comparing Portfolio Growth: With & Without Margin
10:15 – Monte Carlo Simulation: Testing Margin Trading Performance
11:49 – Is Using Margin Worth It?

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

This content is provided by a paid Influencer of Interactive Brokers. Influencer is not employed by, partnered with, or otherwise affiliated with Interactive Brokers in any additional fashion. This content represents the opinions of Influencer, which are not necessarily shared by Interactive Brokers. The experiences of the Influencer may not be representative of other customers, and nothing within this content is a guarantee of future performance or success.

None of the information contained herein constitutes a recommendation, promotion, offer, or solicitation of an offer by Interactive Brokers to buy, sell or hold any security, financial product or instrument or to engage in any specific investment strategy. Investment involves risks. Investors should obtain their own independent financial advice and understand the risks associated with investment products and services before making investment decisions. Risk disclosure statements can be found on the Interactive Brokers website.

Interactive Brokers is a FINRA registered broker and SIPC member, as well as a National Futures Association registered Futures Commission Merchant. Interactive Brokers provides execution and clearing services to its customers. For more information regarding Interactive Brokers or any Interactive Brokers products or services referred to in this video, please visit www.interactivebrokers.com.

The projections or other information regarding the likelihood of various investment outcomes generated by the Tools mentioned in this video are hypothetical in nature, do not reflect actual investment results, and are not guarantees of future results. It is important to understand that these projections are based on certain assumptions and models, and actual outcomes may differ significantly. Please note that results may vary over time.

Any trading symbols, entities or investment products displayed or named in this podcast are for illustrative purposes only and are not intended to portray recommendations.

Margin Trading:
Trading on margin is only for sophisticated investors with high risk tolerance. You may lose more than your initial investment. For additional information regarding margin loan rates, see ibkr.com/interest

Any discussion or mention of an ETF is not to be construed as a recommendation, promotion or solicitation. All investors should review and consider associated investment risks, charges and expenses of the investment company or fund prior to investing. Before acting on this material, you should consider whether it is suitable for your particular circumstances and, as necessary, seek professional advice.

Learn how to pass the FRM exams with these essential tips for mastering Part 1 and Part 2 of the Financial Risk Manager designation. This video covers study strategies like eliminating distractions, practicing lots of questions, using third-party prep providers, and leveraging spaced repetition. Perfect for anyone preparing for the FRM, you’ll gain insights into balancing time, focusing on key areas, and avoiding perfectionism. Watch now to boost your preparation and pass the FRM with confidence!

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Chapters:
0:00 – Intro to How to Pass the FRM Exams
0:22 – Study Lots of Hours & Eliminate Distractions
1:25 – Work a Lot of Practice Problems
2:22 – Use Third Party Prep Providers
3:30 – Practice Spaced Repetition
5:09 – Don’t Be a Perfectionist

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Discover whether the Financial Risk Management (FRM) certification, including FRM Part 1 and Part 2, is worth your time and investment in this comprehensive guide. Learn about the time commitment, costs, prestige, and global recognition of the FRM, as well as the types of jobs and career opportunities it opens up. We also cover average compensation and salary prospects for professionals who complete both FRM Part 1 and Part 2. Join Ryan O’Connell, CFA, FRM, as he breaks down everything you need to know to decide if pursuing the FRM is the right choice for your career in finance.

🎓 *Get 20% Off FRM Courses From AnalystPrep — Use code RYAN20 here:*
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Chapters:
0:00 – What You Will Learn in the FRM
1:26 – The Time Requirement
2:19 – How Much the Test Costs
3:29 – Prestige & Recognition
4:23 – Jobs & Careers Post Completion
7:28 – Compensation & Salary Post Completion
8:38 – Is the FRM Worth It?

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Join Ryan O’Connell, CFA, FRM, as he explains how equity futures contracts can be powerful tools for financial risk management and portfolio hedging. Discover the fundamental concepts of equity futures, including their key uses in adjusting portfolio beta and managing investment risk. Learn the essential formula for calculating the optimal number of futures contracts needed to achieve your desired market exposure. Through a detailed portfolio hedging example, see how to effectively implement equity futures strategies to increase or decrease your portfolio’s beta, making this complex topic accessible for finance professionals and students alike.

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Chapters:
0:00 – Equity Futures Contracts Defined
0:45 – Uses for Equity Futures Contracts
3:02 – # of Futures Contracts Formula
4:54 – Portfolio Hedging Calculation Example

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Dive into the world of Credit Default Swaps (CDS) with Ryan O’Connell, CFA, FRM, as he breaks down these complex financial instruments in clear, practical terms. Learn how to price credit default swaps and understand the key formulas that drive their valuations in the market. Through detailed examples, discover how to determine CDS premiums and calculate potential gains or losses on CDS contracts. Whether you’re a finance professional or student, this comprehensive guide to credit default swaps will enhance your understanding of these important credit derivatives and their role in risk management.

🎓 *Get 25% Off CFA Courses (Featuring My Videos!) — Use code RYAN25 here:*
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Chapters:
0:00 – Definition of Credit Default Swaps (CDS)
0:55 – Pricing a CDS Contract at Initiation
3:57 – Determining Premium for a CDS Example
6:37 – Calculate Gain or Loss on CDS Contract

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Explore the fundamentals of Counterparty Credit Risk in this comprehensive Excel tutorial, where we break down key concepts like Expected Positive Exposure (EPE), Expected Negative Exposure (ENE), Potential Future Exposure (PFE), and Expected Exposure (EE). Learn how to specify mean, standard deviation, and alpha to build a bell curve probability distribution in Excel, providing a solid foundation for understanding these critical risk metrics. This video guides you step-by-step through calculating EPE and ENE, analyzing PFE, and defining EE with practical examples. Perfect for finance professionals, students, or anyone studying credit risk management, this tutorial simplifies complex topics into actionable insights. Watch now and enhance your knowledge with Ryan O’Connell, CFA, FRM!

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💾 *Download Free Excel File Here:* https://ryanoconnellfinance.com/product/counterparty-credit-risk-excel-spreadsheet/

Chapters
0:00 – Setting Mean, Standard Deviation & Alpha for Risk Calculations
0:30 – Building a Bell Curve Probability Distribution in Excel
3:16 – Expected Positive Exposure (EPE) & Expected Negative Exposure (ENE) Explained
7:52 – Potential Future Exposure (PFE) Explained
10:08 – Expected Exposure (EE) Explained

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Dive into the world of financial risk management with this comprehensive guide to Value at Risk (VaR). Ryan O’Connell, CFA, FRM, breaks down the concept of VaR and its critical role in quantifying potential losses in investment portfolios. Explore the three primary VaR calculation methods – Parametric, Historical, and Monte Carlo – each explained in detail to provide a well-rounded understanding of risk assessment techniques. Whether you’re a finance professional, student, or investor, this video offers invaluable insights into VaR methodologies, empowering you to make more informed decisions in managing financial risk.

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Chapters:
0:00 – Value at Risk (VaR) Explained
0:45 – The Parametric Method
4:36 – The Historical Method
6:16 – The Monte Carlo Method

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Explore the powerful Monte Carlo Method for calculating Value at Risk (VaR) in this concise yet comprehensive video. Ryan O’Connell, CFA, FRM, guides you through the VaR Monte Carlo Method process, demonstrating its ability to simulate numerous potential scenarios for more robust risk assessment. Learn how this sophisticated approach to VaR can provide deeper insights into potential portfolio outcomes and risk exposures. Whether you’re a risk manager, financial analyst, or student, this tutorial will enhance your understanding of the Monte Carlo Method for VaR, equipping you with advanced tools for financial risk management.

🎓 *Get 25% Off CFA Courses (Featuring My Videos!) — Use code RYAN25 here:*
👉 https://ryano.finance/cfa

📈 *See Why I Recommend This Broker For Stocks:* https://ryano.finance/ibkr-overview

Chapters:
0:00 – Overview of VaR Monte Carlo Method Process
0:34 – Example of the Monte Carlo Method

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.

Dive into the world of risk management with this concise explanation of Value at Risk (VaR) using the Historical Method. Ryan O’Connell, CFA, FRM, breaks down the concept of VaR and its practical application in financial decision-making. Learn how the Historical Method offers a data-driven approach to calculating VaR, providing insights into potential losses based on past performance. Whether you’re a finance professional or student, this video will enhance your understanding of risk assessment using the VaR Historical Method, equipping you with valuable skills for portfolio management and risk analysis.

🎓 *Get 25% Off CFA Courses (Featuring My Videos!) — Use code RYAN25 here:*
👉 https://ryano.finance/cfa

📈 *See Why I Recommend This Broker For Stocks:* https://ryano.finance/ibkr-overview

Chapters:
0:00 – Value at Risk (VaR) Explained
0:38 – The Historical Method Explained

*Disclosure: This is not financial advice and should not be taken as such. The information contained in this video is an opinion. Some of the information could be wrong. This channel is owned and operated by Portfolio Constructs LLC. Some of the links above are affiliate links, meaning, at no additional cost to you, I will earn a commission if you click through and make a purchase.