This article has been translated from English to Gen Z Slang.

The term “risk off” is like when the squad is lowkey freaking out and just wants to chill and keep their cash safe. 😅 That's when traders and investors in the money game stop getting wild with risks and start hugging their wallets like it's their last dollar. 💰

During a “risk off” vibe, you'll peep safe-bae assets like the Japanese yen and gold going UP ⬆️, meanwhile the high-risk squad like stocks and commodities are totally goin’ DOWN ⬇️.

The flip side of “risk off” is “risk on“.

Markets are often described as being in “risk on” or “risk off” mode because, ya know, they gotta keep it spicy. 🌶️

It's just global market feels served straight-up, no chaser. 🍸

“Risk On, Risk Off” is also called “RORO“.

What’s “risk off”?

When everyone’s doomer-pilled about the economy future, or some wild news drops that's super bad or real sus about future vibes, peeps will wanna bounce away from risky stuff and cop those safe-haven goodies. 🛡️

That’s “risk off“.

When you catch that traders are in “risk off” mode, it’s because they're playing it lowkey by cutting leverage, selling risky swag, and copping "safer" bling, or just stacking those Benjamins in cash. 💸

What are typical “risk off” assets?

Expect stocks to get ghosted by the whole gang. 👻

A lit tip is peeping U.S. stock indices like the S&P 500 and DJIA and see if they’re all dropping to rate the “risk off” vibe check. 📉

“Risk off” assets have U.S. Treasuries and German bunds front and center 'cause these are seen as almost zero-risk royalty. 👑

When it comes to currencies, the U.S. dollar, Japanese yen, and the Swiss franc usually flex hard as traders pull back from carry trades.

Carry trades are when the crew borrows in Japanese yen 'cause its interest vibes are low-key, and use it to grab high-yield stuff in other corners.

You'll see gold prices rising like they just dropped the hottest mixtape, and bond yields taking a nap. 😴

What’s “risk on”?

When the squad’s feeling sunny-side-up about the economy, they're gonna hype up the price of risky assets. 🌞

That’s “risk on.”

Rolling in “risk on” vibes means scooping up risky swag usually with some spicy leverage. 📈

What are typical “risk on” assets?

If you trade stocks, peep those industry stocks that ride hard on economic growth vibes. 💡

Bond traders might peep lower-rated but high-flyin' corporate and sovereign beats, considered “risk on” gold. 🎵

Currency peeps:

  • Commodity currencies like AUD, NZD, CAD, and NOK, 'cause they’re all about that resource life.
  • Emerging market (EM) currencies like MXN, ZAR, TRY, and BRL. Make it global, fam. 🌎

Commodity players also look at industrial metals like copper and pump themselves some energy goods like oil. 🔥

How do you know when the market is “risk on”?

Bop over to our hype-house tool, the Risk-On / Risk-Off Meter, for some real-time tea. 🍵