Asaad on Nostr: Volatility refers to the degree of variation or fluctuation in the price of a ...

Volatility refers to the degree of variation or fluctuation in the price of a financial asset, such as a #stock, #cryptocurrency, or #commodity, over a specific period. It measures the rate at which the price of an #asset increases or decreases.

High Volatility: When an asset's price experiences large and frequent fluctuations over a short period, it's considered highly volatile. This means it can rapidly change in value, presenting higher risk and potential for both significant gains and losses.

Low Volatility: If the price of an asset remains relatively stable and experiences minimal fluctuations, it's considered to have low volatility. Low volatility assets typically have lower risk but might offer fewer opportunities for substantial gains.

Factors like #market demand, #economic conditions, #geopolitical events, and investor sentiment contribute to an asset's volatility. Traders and #investors often use volatility as an indicator to assess risk and make decisions regarding buying, selling, or holding #assets in their #portfolios.

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