One Minute Economics: Volatility Explained in One Minute: From Definition/Meaning & Examples to the Volatility Index (VIX)

  • Friday, 15 November 2019 00:11
Is volatility exciting? Most definitely. Is volatility scary? Most definitely. As contradictory as the two statements may seem, they can both be valid, it simply depends on which side of the fence you are on. As explained in this video, a let's say conservative investor might dislike volatility whereas a trader might love it. Through carefully-chosen examples of volatility, I've done my best to make it clear that this concept is remarkably easy to understand. From the definition or meaning of volatility to examples such as the Volatility Index (VIX) associated with the S&P 500, you will be guided every step of the way. Furthermore, I have also explained what volatility can NOT do, for example tell you if the price of a certain asset will go up or down. Simply put, volatility simply lets you know how wild or tame price swings tend to be when it comes to the asset or asset class you have your eyes on. It isn't the Holy Grail of investing, nor does it have any predictive capacity with respect to price movements. It... well, is what it is :)

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