Today we cover two important concepts that a trader should understand. One is Value at Risk also known as VaR and the other one is realized Volatility. We will walk you through these two concepts, and then we will look at our risk Vol control model and why it is worth looking at it to understand VaR and risk on sentiment. What is Value at Risk (VaR)? VaR is an important method that is widely used by banks and funds to manage risk. Like with all risk methods, there are imperfections, but it is one of the most standardized methods that a risk manager can use to monitor a traderโ€™s book. Every trader in a fund/bank with a proper risk management will have a VaR, this number puts rails around the amount of daily risk a trader can take.ย  VaR is based on a statistical method and helps a risk manager manage the amount of potential loss that could happen over a period of time. VaR is defined as the maximum expected loss over a given time period at a certain confidence level. For exa…