Volatility

How it is used

Common in market reports and risk warnings: high or low volatility, periods of volatility, volatility spikes. The adjective is volatile (a volatile market). Regulators require risk warnings that mention volatility and the chance of losing money.

Example sentences

1. Volatility usually rises around big economic announcements.

2. Our risk notice explains that crypto prices are subject to high volatility.

Common collocations

• high volatility
• price volatility
• volatile market
• periods of volatility
• volatility spike

Related terms

• market capShort for market capitalization: the total value of a cryptocurrency, found by multiplying its current price by the number of coins in circulation.
• liquidationThe forced closing of a leveraged position or a loan when the value of the collateral falls below a required level, so that the lender or the exchange does not lose money.
• leverageThe use of borrowed funds to open a trading position larger than your own money. It is shown as a ratio such as 10x and makes both gains and losses bigger.
• stablecoinA crypto token designed to keep a steady price, usually one US dollar, backed by cash and bonds, by other crypto or by an algorithm. It is used for payments, trading and moving money between platforms.
• liquidityHow easily an asset can be bought or sold quickly without moving its price much. In DeFi, it also means the funds that users deposit into pools so that others can trade.

This word in other fields

The same English word can have a different meaning in another field:

• volatility · Investing & the Stock Market

More terms: Exchanges & Trading

• exchange
• centralized exchange
• order book
• trading pair
• fiat
• spot trading
• slippage