Holding period risk is a financial risk that a firm's

sales quote A sales quote allows a prospective buyer to see the costs that will be involved for desired work. Many businesses provide services that cannot have an upfront price because the costs involved can vary. This can be due to the materials used, which ...

giving a potential

retail Retail is the sale of goods and services to consumers, in contrast to wholesaling, which is sale to business or institutional customers. A retailer purchases goods in large quantities from manufacturers, directly or through a wholesaler, and ...

client a certain time to sign the offer for a commodity, will actually be a financial disadvantage for the offering firm since the

market price A price is the (usually not negative) quantity of payment or compensation given by one party to another in return for goods or services. In some situations, the price of production has a different name. If the product is a "good" in the ...

's on the

wholesale Wholesaling or distributing is the sale of goods or merchandise to retailers; to industrial, commercial, institutional or other professional business users; or to other wholesalers (wholesale businesses) and related subordinated services. In ...

market has changed. The risk is usually reduced by a

risk premium A risk premium is a measure of excess return that is required by an individual to compensate being subjected to an increased level of risk. It is used widely in finance and economics, the general definition being the expected risky return less t ...

being added onto the

price of a commodity by the offering firm. An alternative and less general definition is: Holding period risk is ''the risk, while holding a

bond Bond or bonds may refer to: Common meanings * Bond (finance), a type of debt security * Bail bond, a commercial third-party guarantor of surety bonds in the United States * Chemical bond, the attraction of atoms, ions or molecules to form chemica ...

, that a better opportunity will present itself that you may be unable to act upon''.

References

Market risk {{finance-stub