volatility
unpredictable financial price changes
how much and how quickly a financial price goes up and down
volatility in [market/price/currency]; the volatility of [asset]
- Investors moved into bonds because of the recent volatility in the stock market.
- Oil price volatility has made it harder for airlines to plan their costs.
- The fund is designed for people who want growth but cannot tolerate extreme volatility.
- There was high volatility in the market this week.
- Gold prices showed less volatility than tech stocks.
general instability and unpredictability
a state in which things can change suddenly and are hard to predict
volatility in [situation/place/system]; the volatility of [situation]
- Political volatility in the region made long-term planning difficult.
- The company survived years of volatility before its sales finally became stable.
- Climate change is increasing volatility in weather patterns around the world.
- The country faced a period of political volatility.
- Good planning can help a business deal with volatility.
sudden emotional mood changes
a tendency for someone's feelings or mood to change very suddenly
emotional volatility; volatility in [someone]'s mood/behavior
- Stress and lack of sleep can increase emotional volatility.
- His volatility made it difficult for the team to know how he would react.
- The therapist helped her recognize the triggers behind her mood volatility.
- He is trying to control his emotional volatility.
- Her mood volatility became worse during the stressful month.
tendency to evaporate easily
how easily a liquid or solid changes into a gas
the volatility of [substance]; high/low volatility
- Gasoline's high volatility is one reason it produces flammable vapors so easily.
- The volatility of a perfume ingredient affects how quickly its scent disappears.
- Scientists compared the volatility of several solvents at room temperature.
- Alcohol has high volatility and evaporates quickly.
- The lab tested the volatility of the liquid.
- Base: volatility
- Plural: volatilities, volatility
historical volatility
1measured past price movement
a measure of how much a price moved in the past
- The analyst compared the stock's historical volatility with its current implied volatility.
- Bitcoin has had much higher historical volatility than most major currencies.
- The report measured historical volatility over a 30-day period.
implied volatility
1expected future market movement
a finance measure showing how much traders expect a price to move in the future
- The option became more expensive as implied volatility rose.
- Traders often watch implied volatility before major earnings announcements.
- A fall in implied volatility can reduce the value of an option even if the stock price barely changes.
volatility arbitrage
1trading volatility mispricing
a trading strategy that tries to make money when volatility is priced incorrectly
- The hedge fund uses volatility arbitrage to exploit pricing differences in options markets.
- Volatility arbitrage can lose money when market conditions change suddenly.
- The strategy depends on accurate estimates of future volatility.
volatility index
1index of expected volatility
a market number that shows how much investors expect prices to move
- The volatility index jumped after investors reacted to the surprise announcement.
- Many analysts treat the VIX volatility index as a gauge of market fear.
- Funds that track a volatility index can be risky for long-term investors.
volatility smile
1curved options volatility pattern
a graph pattern in options markets where expected volatility is higher at both low and high strike prices
- The trader studied the volatility smile before pricing the exotic option.
- After the market shock, the volatility smile became much steeper.
- A volatility smile shows that options with different strike prices can have different implied volatilities.