Volatility Definition - Glossary

Volatility is the degree of variation in an asset's price over time, indicating risk and investment potential.

Volatility is a measure of how much an asset's price fluctuates over a given period of time. In the context of crypto and fiat exchanges, high volatility means prices can change rapidly in either direction. This can offer opportunities for profit but also increase risk. Traders often use volatility to gauge market sentiment and potential investment returns. Understanding volatility helps in making informed decisions about when to buy or sell. It is a key factor in assessing the risk and expected returns of trading activities.