Volatility

How violently a price swings

In detail

Volatility measures how much a price moves up and down. Higher volatility means bigger moves in less time, so both gains and losses swell. For the same expected return, lower volatility means a calmer ride. Volatility tends to rise around earnings reports and major news.

Example

On $10,000 invested, a stock that moves 1% a day swings $100 while one that moves 5% swings $500.

Related terms

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For learning, not investment advice. Decisions are your own.

StockFit · TrueNorthLabs Inc.