volatilnosti

Volatilnost is a term used in finance and economics to describe the degree of variation of a trading price series over time, as measured by the standard deviation of logarithmic returns. In simpler terms, it refers to how much the price of an asset fluctuates. High volatility means that the price can change dramatically over a short period in either direction, while low volatility indicates that the price tends to be more stable.

Volatility is a key concept for investors and traders because it directly impacts risk. Assets with higher volatility are generally considered riskier because their potential for large price swings increases the possibility of substantial losses, as well as significant gains. Conversely, assets with low volatility are typically seen as less risky.

Several factors can contribute to the volatility of an asset. These include market sentiment, news events, economic data releases, political instability, and company-specific information. For example, a surprise earnings report or a major geopolitical event can lead to a sharp increase in volatility for related assets.

Traders often use volatility as a tool to assess potential trading opportunities. Some traders seek out high-volatility assets to capitalize on rapid price movements, while others prefer to trade in less volatile markets. Volatility is also a crucial input in option pricing models, as it directly influences the premium an option buyer will pay. Understanding and managing volatility is therefore a fundamental aspect of financial market participation.