Meaning & Definition of word "Volatility"

Volatility

/ˌvɒl.əˈtɪl.ə.ti/

noun:

  • 1. The quality or state of being prone to rapid and unpredictable changes, especially in financial markets.
    • Example: The volatility of the stock market can lead to significant gains or losses for investors.
  • 2. The degree to which a substance can vaporize or change into a gas.
    • Example: The volatility of the chemical compound makes it necessary to handle it with care in a controlled environment.
  • 3. The tendency of prices to fluctuate over time.
    • Example: High volatility in oil prices can affect global economic stability.
  • 4. In finance, a statistical measure of the dispersion of returns for a given security or market index.
    • Example: Investors often look at the volatility of a stock as an indicator of its risk.

Etymology

Late Middle English: from late Latin volatilitas, from Latin volatilis 'flying', from volare 'to fly'.

Common Phrases and Expressions

market volatility:

The tendency for market prices to fluctuate.

volatility index:

A measure of market risk and investors' expectations of volatility.

high volatility:

A situation where an asset's price experiences large swings.

volatile market:

A market characterized by rapid and unpredictable changes in price.

Related Words

instability:

The quality of being prone to change or unpredictable behavior.

fluctuation:

An irregular rising and falling in number or amount; a variation.

risk:

The possibility of loss or injury.

Slang Meanings of volatility

Meaning: Wild swings in stock prices.

Example Sentence: That stock is crazy; it's got some serious volatility right now!

Meaning: A risky investment due to price fluctuations.

Example Sentence: Investing in crypto is high volatility, man, tread carefully.