A type of investment risk that arises from spikes in market volatility or substantial market swings, consequently affecting specific types of investments, particularly those embedded with a large degree of leverage.Examples of such investments include hedged investments, derivatives, highly leveraged instrument, margin accounts, etc.

For equities (e.g., a stock), a market event risk results from substantial changes in market prices typically due to news or developments after trading hours (taking place at times other than normal market hours). At a broader economic level, a jump risk occurs or coincides with currency and stock market crisis.

In general, event risk is reflects the probability that an unexpected event may negatively impact a firm, a sector, stock markets, etc.

This risk is also known as a jump risk or a gap risk.