formal 3K

Volatility

UK //ˌvɒl.əˈtɪl.ɪ.ti// US //ˌvɑː.ləˈtɪl.ɪ.ti// Pronunciation

Definition

The degree of variation in a trading price over time.

Listen to definition

In simple words: How much something changes quickly and unpredictably.

Examples

• The volatility of the stock market shocked many investors during the crisis.
• High volatility can lead to significant gains or losses in trading.
• Volatility in the economy often signals uncertain times ahead.
• Some commodities experience high volatility due to weather conditions.
• Investors must be cautious during periods of extreme market volatility.

Usage notes

Used in finance and economics to describe unpredictable price changes; often found in professional or academic discussions on markets.

Grammar pattern

countable noun

Memory hint

Think of volatile volcanoes that erupt unexpectedly.

Collocations

• price volatility
• market volatility
• economic volatility
• high volatility
• low volatility

Synonyms

• instability
• fluctuation
• variability
• unpredictability
• changeability

Common mistakes

• Confused with 'volatileness' which is not a standard term.
• Using as a verb; volatility is always a noun.
• Misunderstanding its meaning as just 'change' without the unpredictability aspect.