Financial Volatility

Financial volatility refers to the degree of variation in the prices of financial assets, such as stocks or bonds, over time. It indicates how much prices fluctuate, revealing the level of uncertainty or risk in the market. High volatility means prices change rapidly and unpredictably, which can signal increased risk but also potential opportunities. Low volatility suggests steadier prices and stability. Understanding volatility helps investors gauge market conditions, manage risk, and make informed decisions. It is a normal part of financial markets, influenced by economic events, investor emotions, and global developments.