Market Volatility

Market volatility refers to the degree of variation in the price of securities over time within a market. It is typically measured by the standard deviation or variance of returns. High volatility indicates a significant price fluctuation, suggesting uncertainty and risk in the market, while low volatility signals more stable prices. Market volatility can be influenced by various factors, including economic indicators, market sentiment, geopolitical events, and changes in interest rates. Investors often use volatility as a gauge for assessing risk; higher volatility may present both opportunities for profit and increased chances of loss. It is a crucial concept in finance and investing, affecting portfolio management, options pricing, and risk assessment strategies.