volatile(redirected from Volatile fatty acids)
Also found in: Dictionary, Thesaurus, Medical, Encyclopedia, Wikipedia.
Related to Volatile fatty acids: butanoic acid
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.
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.