BeInStocks
All terms

Volatility (Volatilität)

A measure of how strongly and quickly an investment's price moves up and down.

Volatility describes the range of a price's swings. A highly volatile stock makes big jumps up and down; a low-volatility stock moves more calmly.

Example: stock A usually trades between 45 and 55 euros in a year, stock B between 20 and 80 euros. B is far more volatile.

Volatility is not the same as loss. If you stay invested for a long time you can sit out temporary swings. If you need the money soon, less volatile investments make more sense, because selling at a low locks in losses.