Market risk arises from volatility in financial market variables that affect the value of investments, trading positions, or business operations. Banks measure market risk using Value at Risk (VaR), expected shortfall, and stress testing to determine capital requirements and position limits. The 2020 oil price collapse into negative territory demonstrated how extreme market movements can exceed historical patterns and model assumptions. Organizations manage market risk through diversification, hedging strategies, position limits, and dynamic rebalancing. Treasury departments face market risk when managing corporate foreign exchange exposure or interest rate sensitive debt.