Markets and news
What is Volatility?
By the verify.trading team · Last reviewed · How we write
Volatility is how much and how fast a market's price moves. Higher volatility means bigger swings, wider spreads and a greater chance a stop is hit.
Key points
- Size and speed of price moves.
- Rises around news and session opens.
- Wider stops need smaller size.
Volatility explained
Volatility is not constant: it rises around news and at session opens and falls when liquidity is thin. Wider stops in volatile conditions mean smaller position sizes for the same risk.
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