Definition ∞ Stock Volatility refers to the degree of variation in a stock’s price over time. High volatility indicates that a stock’s price can change dramatically over a short period, while low volatility suggests more stable price movements. In financial markets, volatility is a measure of risk, with higher volatility typically implying higher potential for both gains and losses. This metric is closely watched by investors and traders to assess market conditions.
Context ∞ The state of Stock Volatility is a constant factor in traditional financial markets, influencing investment strategies and risk assessment. Discussions often focus on macroeconomic factors, geopolitical events, and company-specific news that drive these price swings. A critical future development involves the use of advanced predictive models to better forecast volatility and its impact on investment portfolios. Understanding this dynamic is essential for managing market exposure.
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