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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