Hi, Whenever there is any negative news or a global event of an extreme nature, you must have noticed, stocks moving consistently up and down.

Hi, Whenever there is any negative news or a global event of an extreme nature, you must have noticed, stocks moving consistently up and down. This is because of volatility. Volatility can be referred to as the constant movement in the prices of the investments. In other words, volatility can be referred to the measurement of how consistently the investment or the index is moving.

The volatility of a single stock can be measured as well as the whole market, thus referred to as the market volatility. In the video, let us discuss about market volatility. What is Market Volatility? Volatility is the measurement of the dispersion of assets for a particular market index or security. This means that volatility is the measurement of how much the asset’s price is moving up or down. The higher the volatility, the riskier the asset is. Now, how is it measured? The volatility of the market can be measured in a number of ways. One of the ways is to analyze that how prices have moved day to day, or month to month for gauging the volatility of the market.

One can focus on the monthly returns of the Nifty 50 and then calculate how much the month’s return differed from the average monthly return of the year. This difference is known as the standard deviation, and it is commonly used measurement of volatility. Another way to measure market volatility is by analyzing the daily price movements. For example, if the Nifty 50 value changes by one percent or more than that in one trading session, then it reflects higher market volatility.

What are the benefits and disadvantages of market volatility? Novice traders often get trap this in a volatile market and have unlimited losses if they don’t put stop loss to their trade. They are also not able to place the order as the prices keep consistently moving. So it is better for the novice traders to stay out of the high volatile market. But the volatile market also has a good side. If the investors have already invested, and the prices spike in the upper direction, they make huge profits.

When the prices fall down, then it offers great opportunities for the investors to buy stocks at discounted prices for the long term. Traders can also develop trading strategies to deal with high volatility in the stock market. This way, they will be ready, no matter if the market volatility is high or low. Market volatility can actually give you the opportunity to fulfill your financial dreams by buying low and selling high.