volatility

volatility definition - finance
An extreme fluctuation in price that affects a stock, bond, or other financial instrument and is usually accompanied by unusually high trading volume. Volatility is caused by expectations of poor earnings, unexpected bad news from some other company in the industry, or external events, such as expectations of a war or political turmoil. Poor economic data or bearish comments from Federal Reserve officials also can cause volatility.

Webster's New World Finance and Investment Dictionary Copyright © 2003 by Wiley Publishing, Inc., Indianapolis, Indiana.
Used by arrangement with John Wiley & Sons, Inc.

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