The first dimension is the threat from the entry of potential competitors, which can have an adverse effect on the profitability of companies, in which case the decision to enter the market depends on the costs of entry and expected future benefits; but the second dimension is the competition between existing companies, which can threaten their competitive position in the market, because entering the market is somehow associated with a cost and decision-making in the market depends on expected future benefits. The aim of this study is to examine the moderating effect of company risk-taking in explaining the effect of competitiveness in the product market on the risk of stock price decline in 125 companies listed on the Tehran Capital Market. The research period was considered from 2012 to 2014. Regression estimation with panel data was used for statistical analyses. The findings from testing the research hypotheses show that the effect of competition in the product market on the risk of stock price decline is statistically significant. The findings are consistent with the information asymmetry theory, and investors assign less weight to the sudden release of bad information and news and the possibility of an increase in the risk of a stock price decline in their analysis portfolios regarding the company's performance and competitive advantage. The results also indicate the moderating role of the company's risk appetite in the significant effect of market competitiveness on the negative skewness of stock returns.