# Investor'sVocabulary: Volatility

If you read financial news and stock market reports at least occasionally, you must have already come across the term "volatility". Today, in the #investor'svocabulary category, we would like to clarify its meaning.

Volatility is a band of fluctuations in the value of securities in the market. The more the stock price is subject to falling or rising, the higher its volatility. And vice versa.

Traders can make good money on lots with high volatility: the greater the spread between the buy and sell prices, the more income they will get if they guess the direction of the asset's value change correctly.

On the other hand, volatility carries high risks: if you predict a rise in the stock price instead of a fall, you can lose a lot of money.

Experienced traders know that low-volatility securities cannot become cheaper or more expensive for no reason. For example, stocks with 1% volatility will not rise by 5 % in the absence of news. On the other hand, any news about a company, market or technology can affect the value of its securities, and therefore high-quality information always plays into the hands of investors and traders.

After any lull in the market, there is always a storm, and the longer the period of low volatility lasts, the more prices will fluctuate in the future. Inexperienced investors should not enter the market during high volatility: at this time, the quotes reflect more the emotions of players that are difficult to predict, and therefore the situation carries significant risks.