volatile(redirected from Volatil)
Also found in: Dictionary, Thesaurus, Medical, Encyclopedia.
A measure of a security's stability. It is calculated as the standard deviation from a certain continuously compounded return over a given period of time. It is an important measure in quantifying risk; for example, a security with a volatility of 50% is considered very high risk because it has the potential to increase or decrease up to half its value. Volatility may influence the type of investments one makes: one may directly invest in non-volatile securities, such as a certificate of deposit, but highly volatile securities lend themselves more to short selling and other forms of hedging.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
Tending to be subject to large price fluctuations. Traders generally prefer volatile securities if they buy and sell on short-term price movements. See also beta.
Wall Street Words: An A to Z Guide to Investment Terms for Today's Investor by David L. Scott. Copyright © 2003 by Houghton Mifflin Company. Published by Houghton Mifflin Company. All rights reserved. All rights reserved.