Risk Shifting

See: Risk Seeking.

When you shift your appetite for risk, you change the manner in which your portfolio or business is positioned. If you're bullish about your alpha, or sense for where the market or your particular investments are heading, either up or down, then you'd want to add gasoline to the fire, add risk, make your bets with derivative instruments or leverage, so that if (when?) you're right, you make 5x your money instead of a paltry 2.34234x.

Investors, particularly hedge fund people, shift risk appetitie all the time. When they're very confident in a bull or bear scenario, they'll add risk or leverage. When they're not, they typically de-risk by having cash be a big part of the portfolio, or just reducing leverage and exposure to their bets.