What is Volatility?

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We can easily define Volatility as a tool for measurement of how far the price of a security might move in the future. This can be seen in the light of high volatility which means that we will see large swings in price and fast movement.

Similarly when volatility is low, it means that prices are expected to remain relatively stable.It is the average human tendency to avoid volatility and traders love stable market. However one can make a good amount of money in volatile markets as movement in stocks is large as nervous investor tends to withdraw money from the share market and decides to park their money in safe heavens like gold.

You can read more about India VIX here to get an idea that how does it affects movement in Nifty.

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