Glossary

Volatility refers to the degree of fluctuation in the price of a security, asset, or financial market over time. 📈📉

It is an important measure of risk, as higher volatility often implies greater uncertainty and potential for loss. Volatility can be influenced by various factors, such as market sentiment, economic events, and company performance. Investors often use historical or implied volatility to gauge the potential risks of their investments.

Example: A stock with a higher volatility will have larger price swings, while a stock with lower volatility will have steadier, less dramatic price movements.

Fun fact: The CBOE Volatility Index (VIX), also known as the "Fear Index", measures the expected volatility of the S&P 500 Index over the next 30 days. Investors and traders use the VIX to gauge market sentiment and evaluate potential risks in the broader stock market. 😱