As is often the case, there can be a wide chasm between the academics and the actual “boots on the ground” experience. Today, we’re going to travel just a bit off the reservation and discuss why volatility is not the same thing as risk. In fact, we’ll explain why we as traders...
Volatility measures how much the price of a stock, derivative, or index fluctuates. The higher the volatility, the greater the potential risk of loss for investors.
Investorscan find periods of high volatility to be distressing, as prices can swing wildly or fall suddenly. Long-term investors are best advised to ignore periods of short-term volatility and stay the course. This is because over the long run, stock markets tend to rise. Meanwhile, emotions ...
As the stock consolidates into the Volatility Contraction Pattern, we begin to see the influential support indicators like the 20ema, 50sma, and VWAP have moved below the price action. This is yet another red flag for short-biased traders to run for cover. No pun intended. 4. The Breakout...
When this came up, I said, “Gemma, if we’re going to write about the extraordinary leadership that is going to be required, we have to understand what to do in crises where there’s a high degree of volatility and uncertainty and we don’t know how long it will las...
You rebalance yearly to reduce your volatility. If you do not rebalance, bonds will likely be underrepresented, increasing your volley. This is up to you and will mostly depend on your risk capacity. And if you do not have any bonds, you will not have to rebalance anything. ...
"We have clustering in market volatility where you see those big sell-offs, and then you see the subsequent gains," Bitterly said, noting how people often pull out of the market on sell-off days when they think they can't withstand the risks. ...
Diversification is the concept of putting your money into various types of investments that often don't react the same way and at the same time tomarket volatility. A diversified portfolio could have different types of securities, such as large cap stocks, small cap stocks, international stocks ...
Market volatility and strong demand for swaps made hedging difficult and costly. Mortgages have an implicit optionality, much of which is associated with a borrower's ability to repay a loan early. Mortgage lenders are exposed to negative convexity. The use of swaps by banks is controversial. ...
Inventory volatility Shipping complexities 1. Lower profit margins The accessibility of dropshipping can lead to intense competition, resulting in lowerprofit marginsas businesses undercut each other. The more you reduce prices, the harder it becomes tocalculate profit marginsthat work for your store....