Volatility

Nguyen Hoang Son, a foreign-exchange trader at Citigroup Inc. in Ho Chi Minh City, spoke on the outlook for Vietnam's dong. The local currency gained 0.9% today, the most since April 1999, to 16,640 a dollar at 4:46 p.m. in Hanoi, according to data compiled by Bloomberg. The Southeast Asian country increased retail prices of gasoline by 31 percent and kerosene by 44 percent today. ``A lot of

Indian equities closed in negative amid volatility. Heavy selling activity was witnessed in Pharma, technology, FMCG, while Auto, Oil & Gas and Metal stocks gained. Midcap and Smallcap index declined 0.64% and 1.10% respectively.The BSE Sensex opened on a negative note, following weak global cues, at 13,360.34, down 109 points from the Friday`s close.Ranbaxy, Satyam, Infosys, TCS, HDFC, Hindal

by Steve Selengut Gets your attention, doesn’t it? The unfortunate thing though, is that most people will react negatively to this intentionally inflammatory, media-ready, title statement. Has some Wall Street virus attacked our financial experience memory chip? Bouncing around unpredictably is precisely what the markets have always done. In the last forty years, there have been [...]

[How we can beat stock markets volatility,investors and traders/bargain hunters/how warren buffet and berkshire did it/s&p 500/marc faber says 12k support for sensex/MARKET NEWS/stock market- operated by chidambaram?/SHOPPING TIME/people stuck in put options/Right time to buy shares/Oversubscription Figures I P O/Suggest stock for long term/SUB-PRIME ISSUE/BSP withdraws support to UPA Govt/fut

KUALA LUMPUR: Stock prices on Bursa Malaysia closed broadly lower on Tuesday on very low volume, as investors continued to exercise caution in the wake of rising fuel costs, inflationary pressures and the impact on the broader economy. External concerns remain uncertain, with Wall Street and crude oil exhibiting high levels of volatility in recent days as investors react to the prospect of higher

Volatility Index is way to measure of market’s expectation on volatility over near term of volatility over the near term. Volatility is described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by which an underlying Index is expected [...]

By: Brendan Most retail forex traders only know how to place directional trades, and miss the chance to profit on volatility. Everyday there are economic data from US, UK or Europe, namely Non-farm payroll, New Homes Sales, Unemployment, Personal Income, CPI, PPI etc; some of these datas can move the forex market rather wildly. So to trade [...]

By Rob Curran Of DOW JONES NEWSWIRES NEW YORK (Dow Jones)–June 20 will be quadruple-witching: when traders will push and pull the stock market by covering positions before options, index-options, futures and index-futures expire. To compound that volatility, it is also the last trading day before Standard & Poor’s rebalances its indices to reflect changes [...]

What is Volatility Index? Volatility Index is a measure of market’s expectation of volatility over the near term. Volatility is often described as the “rate and magnitude of changes in prices” and in finance often referred to as risk. Volatility Index is a measure, of the amount by

It’s been a while since the last pick I have posted because I am focusing more on conceptual articles and supplemental income ideas due to the results of this poll. But I know many readers have free money and want to invest them for good profits, so I have not forgotten what gathers us all [...]

Most people think of terms like “bear” and “bull” when they think of vertical spreads.  That is because they are commonly seen as directional plays.  However, vertical spreads do have other uses.  They can be used for both volatility trading opportunities and time decay trading opportunities. Although at-the-money clearly has more value than in-the-money or out-of-the-money [...]

Most people think of terms like “bear” and “bull” when they think of vertical spreads.  That is because they are commonly seen as directional plays.  However, vertical spreads do have other uses.  They can be used for both volatility trading opportunities and time decay trading opportunities. Although at-the-money clearly has more value than in-the-money or o

Risk aversion trade finally kicks in again as JPY crosses swoon - is it for real this time? BOE also on tap. MAJOR HEADLINES – PREVIOUS SESSIONUS Consumer Credit rose to $15.3B vs. $6.0B expected New Zealand Q1 Unemployment Rate rose to 3.6% vs. 3.5% expected and 3.4% in Q4 UK Apr. NIESR GDP Estimate out at 0.4% Australia Apr. Employment Change out at 25.4k vs. 10.0k expected Australia Apr. Unemployment Rate Ticked up to 4.2% vs. 4.1% expected and 4.1% previouslyTHEMES TO WATCH – UPCOMING SESSIONKey Risk Events (All times in GMT) Germany Mar. Trade Balance (0600) Sweden Mar. Industrial Production and Orders (0730) Germany Mar. Industrial Production (1000) UK Bank of England to Announce Rates (1100) EuroZone ECB to Announce Rates (1145) EuroZone ECB's Trichet to Hold Press Conference (1

My pivot for today is the 1402-1405 area. Above the pivot, my close range targets are 1407 and 1408.50 with my longer-range targets being1412, 1416, and 1419. Below the pivot, my close range targets are 1400.50 and 1397.75 with my longer-range targets being 1393, 1389, and 1385. Some support and resistance levels are 1369-1372, 1381-1383, 1393-1394(small), 1415-1417(small), 1422-1425 and 1430 area

Readers of this blog will notice that a couple of picks of mine have been in the dog house, while others have performed well in a choppy market. Unfortunately, for the casual web surfer who stumbles onto here, they will focus more on the stocks that have been down.

"Option Volatility & Pricing: Advanced Trading Strategies and Techniques" by Sheldon Natenberg presents straightforward, practical concepts valuable for both equity and derivative trading. Understanding derivative mechanics leads to deeper insight of the underlying securities, this book explains the why’s and how’s. Some reasons you should learn option trading <!--[if !supportLists]-->

               If you are a nifty trader then you should be familiar with Nifty Volatility Index VIX    India VIX                                                          Volatility Index is a measure of market's expectation of volatility over the near term. Volatility is often described as the "rate and magnitude of changes in prices" and in finance often referred to as risk. Volatility Index is a measure, of the amount by which

This is the sixth post in the Dividend Increases series. I think dividend-investing is one of the few free lunches left in investing. Most people looking for higher returns are often confronted with persistent market volatility, but it doesn’t always have to be that way. The strongest driver behind my investing in dividend-paying stocks [...]

Wide spread selling in Bankex and other major indices saw the Sensex slip from higher levels and end below 16,700. Continuing the volatile trend, the Sensex rose sharply in the first half due to... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

HONG KONG, April 23 (Reuters) - A prolonged U.S. slowdown, extended global market volatility and rising inflation are the main risks facing Asia's local bond markets, a report from Asian Development... [[ This is a content summary only. Visit my website for full links, other content, and more! ]]

Thanks mj*laflaca for this photo Big ups and big downs create interim situations that can favor the bulls and the bears. I always liked the Warren Buffet’s quote, “When the tide goes out we get to see who is not wearing a bathing suit!” I can just visualize Warren selling a surprised naked swimmer a pair [...]

CURRENCY TRADING SUMMARYU.S. Dollar Trading (USD) strengthened on the back of indications the G7 summit was concerned over recent market volatility, “Since our last meeting, there have been at times sharp fluctuations in major currencies and we are concerned about their possible implications for economic and financial stability.” The G7 statement also suggested that “exchange rates should reflect economic fundamentals,” indicating the G7 is concerned about currency levels. The news coming from G7 is positive for the dollar, whilst it doesn’t indication direct action, it does signal the next move towards coordinated foreign exchange intervention. U.S data news released on Friday had little impact in comparison to the G7 commentary as the Michigan Sentiment report fell 6.3 points t

How are you feeling about investing nowadays? Do you own stocks that have tanked over 25% in one day? I did. On one occasion I got so worried by the fall in the stock price, that I sold it for a big loss only to see it bounce back a week later. That hurt. However I was glad to find that my reaction to a volatile stock market is line with a lot of investors. My reaction though should have been more thoughtful and I could have avoided an unnecessary loss.Too often people panic and take drastic measures. Long term investors have to realize that the market is going to have corrections and if they panic when these corrections happen they will lose money. Here are some well known guidelines to consider for these volatile situations, that are worth revisiting:1. Take a step back, look at the big

As you know, in recent months I have been tracking the S&P 500 index as it has descended into a classic “Bear Market” trade down that appears remarkably similar to the nearly 50% selloff that it experienced in the wake of the “dot-com” bust.But aside from technical similarities (that I will cover again in a later “Twin Peaks” post) I would like to share an interesting chart that I whipped up in an attempt to better reveal the trend and volatility inherent in the broad index and more importantly, the role volatility plays in signaling a bottom to a market selloff.One important aspect to consider before delving into the chart is the true temperament of the bottoming process.Reflecting a bit on markets and human nature, I believe that any real bottoming to the stock market mus

The markets over the last two weeks have been quite interesting to observe. In part thanks to the new credit facilities from the Fed, the banks bought more time to settle their issues. And, oh boy, there are still plenty of them. It will take quite a bit of time, maybe even a year or two, to clean up the risky mess associated with asset-backed securities and derivatives. I do not really buy

See the Power of Astrological calculation we will see volatility and uncertainty in Market on 23rd April 2008 - 24th April 2008 - 25th April 2008 and 28th April 2008. Be Careful.Crucial support for Sensex and Nifty.The crucial support for the Sensex is at 15603, 15396, 15272, 15148, 14816, 14485, 14153, 13822 levels and Resistance is at 15811, 15935, 16059, 16266, 16474, 16805, 17137, 17468, 17800 levels.The crucial support for the Nifty is at 4644, 4599, 4554, 4434, 4315, 4195 levels & Resistance is at 4718, 4793, 4838, 4883, 4957, 5032, 5151, 5271, 5390. if Nifty cross 5153 level then after fresh buying will be seen.Target for Sensex is 17137 and Nifty is 5271 in the days to come.

Here is an insightful quote from Thomas Friedman in a recent New York Times speech..."When we were young kids growing up in America , we wereTold to eat our vegetables at dinner and not leave them.Mothers said, think of the starving children in India and finish the dinner.'And now I tell my children: 'Finish your homework. Think of the children in IndiaWho would make you starve, if you don't.'?" With that, here is the latest installement of Dale Gillham's weekly market report:Given that the volatility in our market has continued to unfold in recent months, many are beginning to question whether the share market is really a good investment. However, as many of you would know with every pull back there are always opportunities that present when the volatility settles. Over the past few month

In spite of Dow Jones closing in the negative territory with near about 1% down none of the Asian Markets have intraday lows of even 1% that speaks strength. Nifty should open gap up at 4880 and then try to move towards 4920, I think it might even break 4920 and try to show the figure of 4980. Nifty 5000 Call could be bought in the range of 125 - 135 for a target of 180 and if 180 is substantially broken then 220 stop loss could be placed at 110.Now coming to Nifty options strategies for April, as I had said in my earlier post that Nifty would be heading towards 5200 or 4200 with the probability of 5200 significantly more than 4200, Nifty is moving towards 5200. As of yesterday when Nifty was at near about 4800 with both be the targets being substantially far, buying Nifty Put and Call Opt

The Nifty Index might just open gap down towards 4800 and then might try to get into positive territory, once it has spend some time in positive territory, volatility might show it effects and drag it in the negative. As for closing I am still maintaining that 4740 or 4780 might be the closing, but since short term view is that Nifty should head towards 5200 a closing of 4740 might be just ignored leaving us with 4780, Now Considering 4780 to be closing Nifty 4900 Put Option could be bought at around 90, if the Market behaves exactly as said before then at around 75.Now For the Next Month series I think 5200 or 4200 might be achieved in this month (high probability of 5200) so Nifty Out of Money Calls along with equally priced Nifty Put Option could be bought and then both could be sold on

Today is not going not be as bullish as yesterday but it may not be bearish either, A Gap up opening could drive the Nifty up towards 4920 but it would not be one sided bullish as yesterday, volatility would be the theme today. So any big rises of 30 -40 points could be used to sell while the drops could be used to buy. Trade hourly, if any hour as given big rallies sell expecting dips but don’t trade for big shots a small 0.5% profit on any side could be used to exit.Now Coming to F&O, I expect Nifty to close at 4980 this F&O closing unless it drops big today so Options could be bought with that target in Mind. Nifty 4800 Call could target 160 if bought near about 120 – 130.Would try to update at 10.30 and 11.30

CURRENCY TRADING SUMMARYU.S. Dollar Trading (USD) market closure due to Good Friday holidays ensured thin volumes of trading in light of recent volatility. All financial markets were closed on the 21st of March; ensuring stock remained unchanged from Thursday’s close. Crude oil fell slightly on Friday, in follow through from recent commodity sell offs, falling by US$0.81 a barrel to US$101.03. Trading is scheduled to resume on Monday, with data including Existing Home Sales for the month of February. Economists are forecasted that the figures will decline from 4.89 mln to 4.85 mln. The Euro (EURO) was also subject to a quiet day to market holidays, instead finding interest from Asian markets and currencies. Overall the EURUSD traded with a low of 1.5405 and a high of 1.5472 before los

Contributed by Tony Stevenson   During the last few weeks, the Market Pulse has provided you with insight into what moves mortgage markets, and more specifically, how investor demand influences the market place. This week the market has continued to be volatile. Mortgage originators sold parts of their ARM portfolios and were met with investors demanding higher rates of return. Bear Stearns borrowed money through JPMorgan Chase and from the Federal Reserve Board because their exposure to mortgage risk caused a crisis in confidence that drained their finances.                                  To restore confidence

  Negative cues from the global markets and heavy selling by foreign institutional investors led the Indian market to suffer losses for the third straight week. Volatility was high in the truncated week, which had only three trading sessions. The market remained closed from March 20 to March 21 on account of Id-e-Milad and Good Friday. The BSE Sensex lost 765.69 points or 4.85 percent to 14,994.83 in the week ended Wednesday. The S&P CNX Nifty slipped 171.85 points or 3.62 percent to 4573.95 in the week. The BSE Mid-Cap index lost 619.35 points or 9.40 percent to 5,964.10 for the week. The BSE Small-Cap index slumped 857.30 points or 10.61 percent to 7,222.20 in the week. Trading for the week began on a bearish note as global markets suffered setback with the benchmark index BSE

I took a look at the 2000 top for the S&P and compared how volatility from then compared to now. During the 2000 peak there were four small sub-30 micropeaks, a sharp drop, then a rally to 35 which was associated with the cliff fall for the early part of the 2001 decline in the S&P. Monday's peak above the recent triple top may precede such a decline, although breadth indicators do suggest otherwise (i.e. this will shape into a double bottom). However, it has been a while since the VIX has seen a spike to 45. It would be hard to argue against another one happening soon, which would mean more pain for the markets.The Fed may bring some short term welcome relief, but when the guts of next rally are done we could have the kind of setup where a VIX spike to 45 would be favored. Perhaps Septemb

Bharatbook.com is proud to announce the new report “Understanding Volatility and Liquidity in the Financial Markets” ( Introduction Based on intensive research projects conducted at a range of commercial and investment banks, Understanding Volatility and Liquidity in the Financial Market provides an in-depth and practical guide to the implementation of a risk management system. Understanding Volatility and Liquidity [...]

Sten Corp. (STEN) is the latest microcrapper to go exponential. It’s a thinly traded, low float debt laden ($9mil) $10-$15mil company (depending on whether the last price was at the bid or the ask!) up on “strong earnings”. Who really knows what’s going on with the company’s business—with companies this small, one little sketchy deal [...]

Temporary falls in the prices of quality companies only cause a real loss if you are forced to sell. Astute investors are those who emotionally overcome their distaste of volatility and recognise that their ability to it is what gives them a high return.Or, as Warren Buffet puts it: To invest successfully over a life time does not require a stratospheric IQ, unusual business insights or inside information. What's needed is a sound intellectual framework for making decisions and the ability to keep emotions from eroding that framework.

The stock market has become very volatile and irrational over the last year. I contribute some of this volatility to the uncertain economic climate. However, in my opinion a big cause of the huge price swings in the market is the tremendous growth of hedge funds and their need to generate short term returns. Hedge funds [...]

There was an interesting relationship between profitable long trades in the S&P and the Zig-Zag indicator applied to the VIX. Over the past 10 years there have been 4 periods when a trade initiated at turns in the Zig-Zag indicator have turned profitable long trades - with no failures. The 'buy' side Zig-Zag signal has matched reaction lows in the S&P very nicely. The 'sell' side Zig-Zag signal has been a little early, although during the 2000-2003 Bear market it gave a perfect signal. However, one thing which has been consistent across 'sell' signals has been a lower 50-day MA compared to the 200-day MA. In the current market, this would approximate to another 6-months of VIX weakness/sideways action (and higher market prices). In terms of S&P returns it could be anything from 15-50% depe

The past six months or so have been especially hard on the constitutions of all classes of investors. With the subprime mortgage mess in the US wreaking havoc on the global markets investors have watched the value of their portfolios dip 10-20%. It has been scientifically demonstrated that the human response to loss is twice as high as that of gain, so it biologically natural for us to have an emotional reaction to what is happening in the markets.Emotion is the nemesis of the long-term investor. Remember that. It can prompt us to make irrational short-term decisions based on fear that can do terrible damage to our long-term savings goals. As hard as it will be, you must detach yourself from what is happening in the markets. You can't control it, and if you try you will do more harm than g

Tomorrow is options expiration day for January, so more volatility is to be expected as investors and traders alike will be rolling over and/or adjusting their positions. Today’s volume was 50% higher than the average volume for the last 3 months. There has been a pretty good size of buying volume lately creating some accumulation. Over all levels are still negative, but with the size of

Just when I was getting sick and tired of being sick and tired, the volatility in the solar stocks comes back to remind me why I love trading. I went into today short (Nasdaq: DSTI) and I was a bit nervous considering its strong Friday close and the morning strength we had today. But, as you saw in my last post, I was determined to hold it for a few days because I really think the company is a POS and the recent strength was a gift to short into. Bingo! After trying to h

The gist of the article is that when you're making asset allocation choices, it isn't enough to look just at the usual suspects of bonds, US equities, global equities, commodities, etc. Volatility itself, say the authors of a research paper just out from Goldman Sachs, should be treated as an asset class deserving of its own allocation...

RULES:Set buy stop at 70% of yesterdays range (high minus low) added to todays open + spread. Stop loss is 50% of yesterdays range deducted from entry point.Set sell stop at 70% of yesterdays range (high minus low) dedcuted from todays open. Stop loss is 50% of yesterdays range added to entry point plus spread.If at the end of the day, if neither of the enties levels have been, cancel all order and repeat same again tomorrow.Condition: you can only trade in 1 direction. So if your buy stop has been trigerred and stopped out, you cannot take a short on the same day. This only occurs around 7% of trades.DivShare File - volatility-expansion-system-evolatility-e.mq4

There are some who argue that the increase in volatility is a sign of a market top, implying that we may be entering a bear market. So, to see if this is in fact the case, Bespoke Investment Group did a little research. Bespoke went back to 1945 and charted the total number of days where the S&P 500 moved 2%. They then overlayed the chart with gray bars where there was a bear market(defined as a 20% decline on a closing basis in the S&P 500). As a result of their research they found that the increase in volatility does not directly corr

Recent Increases in the volatility of the financial markets have many investors thinking about their portfolios and wondering if they should make changes. This is therefore an excellent time to discuss the importance of maintaining a disciplined approach to diversified investing. Here are four key points to keep in mind about disciplined, diversified investing during periods of market volatility: 1) Diversification is a tool designed to reduce risk. In the financial markets risk and reward go together. Higher reward investments tend to carry greater risk. Although all investors would like nothing better than a high reward investment that carries low risk, it is important to remember how rare that is. When one diversifies one’s portfolio, it is to reduce risk. We do not diversify in order to maximize reward, rather we diversify in order to reduce risk and portfolio volatility. 2) If one’s portfolio is properly diversified, then one need not carry around a great deal o

Perhaps the most difficult aspect of William O'Neil's Canslim method of buying stocks is that it is usually difficult to determine the proper buy points. Furthermore, for the average investor, it is almost impossible to always be on top of the market, trying to spot those high-volume breakout days. In this post, the results of a volatility breakout system using the IBD 100 are presented, in which the above difficulties are addressed.

The CBOE Volatility Index® (VIX®) is a key measure of market expectations of near-term volatility conveyed by S&P 500 stock index option prices. Since its introduction in 1993, VIX has been considered by many to be the world's premier barometer of investor sentiment and market volatility.

Now is the time where hedge fund managers will earn their keep. Earnings season, market volatility, high oil price and possible rate cuts. Working out a strategy that ties all these together and ends ups with a correct trade in each or a trade that makes all these factors neutral, has to be the Holy Grail over the next few weeks and months. Strategies are being created and battle lines being

Mid July 2007 has caught many carry traders off-guard. Currency investors are suffering their biggest losses in years as wider swings in Forex currency market knock the carry trade off the rails. Carry trade, the most profitable strategy in foreign exchange, thrives when exchange rates are stable since the technique involves buying and investing currencies of [...]

From Chicago TribuneWall Street boiled in its own juices Thursday, sending stock prices sharply lower but ending the day flat.No one could say when this summer's wild swings, magnified by debt-financed trading by megabuck players, will be over."We're in for a period of instability," said Gary Brinson, a private investor in Chicago who manages his own family and endowment funds."You don't know the magnitude of the leveraged positions and the extent to which people will be forced to sell."The Dow Jones industrial average closed down a mere 15.69 points, at 12,845.78. At midday the Dow was off 343 points, sinking nearly 1,500 points from its peak of 14,000 just a month ago.The benchmark Standard & Poor's 500 index closed up 4.57, at 1411.27, after being off at midday more than 2.5 percent from Wednesday's close. Before the rebound, the S&P slumped to a 10 percent loss from its July 19 peak.[Read more]

Product DetailsPublisher WileyRelease Date April 13, 2007ISBN 0471794643Book DescriptionPraise for Option Pricing Models & Volatility Using Excel-VBAExcel is already a great pedagogical tool for teaching option valuation and risk management. But the VBA routines in this book elevate Excel to an industrial-strength financial engineering toolbox. I have no doubt that it will become hugely successful as a reference for option traders and risk managers.Peter Christoffersen, Associate Professor of Finance, Desautels Faculty of Management, McGill UniversityThis book is filled with methodology and techniques on how to implement option pricing and volatility models in VBA. The book takes an in-depth look into how to implement the Heston and Heston and Nandi models and includes an entire chapter on parameter estimation, but this is just the tip of the iceberg. Everyone interested in derivatives should have this book in their personal library.Espen Gaarder Haug, option trader, philosopher, nd

Bank Indonesia, the country's central bank has been selling US dollars over the past few days in a bid to dampen volatility in the rupiah, central bank governor Burhanuddin Abdullah said. The rupiah along with many other currencies in the region have come under heavy selling pressure in recent days as investors dump assets viewed as risky in a global flight to safety move prompted by fallout from the US subrime mortgage loans problem. At midday here, the rupiah had weakened to 9,480/9,490 to the US dollar from 9,417/9,425 late Wednesday.Indonesia News Blog: http://indosnesos.blogspot.com

International prices for soft commodities are known for their volatility, which is an important concern on both a macro and micro scale. Price fluctuations for soft commodities can destabilise real exchange rates and can cause difficulties for the governments of emerging market countries in facilitating the reduction of poverty and preserve a stable economic environment. On a micro scale, we are primarily concerned about the effect of price uncertainty on the operations of producers and traders in commodities. Volatility often leads to inefficiency and impairs the efficient allocation of resources for farmers. The higher and more unpredictable the price volatility of a commodity, the greater the possibility of incurring losses or realising gains on future sales or purchases of that commodity. Moreover, the uncertainty reduces the opportunities to access credit markets and can drive farmers and producers to utilise low risk production techniques and technologies, lowering incomes and no

Volatility DefinitionIn finance, volatility is a statistical measurement of up and down asset price fluctuations over time. If an asset has rapid dramatic price swings, volatility will be high. If prices are consistent and rarely change, volatility is low. Volatility can be measured as the annualized standard deviation.Volatility as Measure of RiskVolatility is often used to measure risk. Many common measurements of risk, such as beta, utilize volatility in calculations. It makes sense that an asset that has had huge price swings is more risky than an asset that is not volatile. Upside vs. Downside VolatilityHowever, the actual effectiveness of using volatility as a measurement of risk is questionable. The main imperfection of volatility is that it does not differentiate upside and downside price movements. For example, assume a stock decreased in price from $10 to $2. Also assume that the stock exhibited low volatility before this price decrease. In this example, volatility was lower

Volatility DefinitionIn finance, volatility is a statistical measurement of up and down asset price fluctuations over time. If an asset has rapid dramatic price swings, volatility will be high. If prices are consistent and rarely change, volatility is low. Volatility can be measured as the annualized standard deviation.Volatility as Measure of RiskVolatility is often used to measure risk. Many common measurements of risk, such as beta, utilize volatility in calculations. It makes sense that an asset that has had huge price swings is more risky than an asset that is not volatile. Upside vs. Downside VolatilityHowever, the actual effectiveness of using volatility as a measurement of risk is questionable. The main imperfection of volatility is that it does not differentiate upside and downside price movements. For example, assume a stock decreased in price from $10 to $2. Also assume that the stock exhibited low volatility before this price decrease. In this example, volatility was lower

Volatility Definition In finance, volatility is a statistical measurement of up and down asset price fluctuations over time. If an asset has rapid dramatic price swings, volatility will be high. If prices are consistent and rarely change, volatility is low. Volatility can be measured as the annualized standard deviation. Volatility as Measure of Risk Volatility is often used to measure risk.

VIX very comfortably above 15 today. Some months ago I blogged that reversion to the mean could surprise many who were thinking we'd gravitate back to the good old days of sub-11 VIX after the late Feb dislocation. It never happened. Monthly charts of the VIX show long term averages are far above present levels. While the players who played VIX call strikes above 13 in May left the party

by ZMAN (zmansenergybrain.com) Stocks: Performance was nothing to write home about: The service stocks put on a show late in the week, with the Oil Service HOLDRs ETF (OIH) ending at an all time high. Multiple comments from service company stalwarts about improving conditions, along with multiple buyout rumors and a very resilient natural gas strip, pushed the group higher. Current service

by ZMAN (zmansenergybrain.com) Stocks: Performance was nothing to write home about: The service stocks put on a show late in the week, with the Oil Service HOLDRs ETF (OIH) ending at an all time high. Multiple comments from service company stalwarts about improving conditions, along with multiple buyout rumors and a very resilient natural gas strip, pushed the group higher. Current service

From Japan TimesMore than a month has passed since the Shanghai stock market plunge sent shock waves throughout global markets in late February. Although share prices have since stabilized, volatility rife in foreign-currency markets, with the dollar-yen rate sometimes fluctuating nearly 2 yen a day.Stock markets are prone to synchronized global downturns when new types of shock arrive. But it should be noted here that the biggest factor behind the markets' recent problems is excess liquidity.Even in a global chain reaction, different reasons particular to each country work to push down share prices, and the size of the decline varies.In the United States, share prices are under downward pressure from pessimism over the U.S. strategy for Iraq, and the possibility that tons of housing loans extended by subprime mortgage lenders will go sour.In Japan, political uncertainty over local elections and the House of Councilors elections in July are casting a pall over the stock market.In Chin

From RIA NovostiBEIJING, March 12 (RIA Novosti) - China's stock market fluctuations do not reflect any macroeconomic problems, the country's chief banker said Monday.World stocks have recovered some of the ground lost in the drastic sell-off of global equities that began February 27 when China's Shanghai Composite, the country's main stock index, plunged nearly 9 percent."I personally believe that there are no problems at the macroeconomic level and stock market price fluctuations will not lead to any substantial change in trends," Zhou Xiaochuan told a press conference on China's monetary policy.At the same time, Xiaochuan declined to answer directly whether the global sell-off was triggered by a sharp fall in China's stocks."Initially China believed that its share market was comparatively small and at a nascent stage in its development. But economic globalization has created a close relationship between fluctuations on various stocks markets. This is a testament that we must ac

Wow what a day. Down 200, up a little and then finally settling a little below. What to make of this? I am staying put. No trades. As I said yesterday, wait for the market to figure out its direction. Add a few more names to your shopping cart. Above all, do not trade this volatility.-- Faisal Laljee

Days like today are good days to be sitting in CASH instead of getting whipsawed. And thanks to my intermediate-term model's signal that is exactly what I am doing. First the early shorts got burned this morning then the late to the party bulls got burned this afternoon. This kind of volatilty is typical of trend changes, as the market is transitioning from an intermediate-term bull phase to an

Days like today are good days to be sitting in CASH instead of getting whipsawed. And thanks to my intermediate-term model's signal that is exactly what I am doing. First the early shorts got burned this morning then the late to the party bulls got burned this afternoon. This kind of volatilty is typical of trend changes, as the market is transitioning from an intermediate-term bull phase to an

Stunned with wide eyed amazement describes my day. I stood aside most of the day. I was up 276 on my first trade but later on I made two major mistakes. I tried to go long POT twice and I was lucky that I only lost 185 during the afternoon slide from those bottom fishing plays. When it bounced I made a 100 back, so I ended my day with $171. I got to reflect and figure out how to play days like these even though it may happen only a few times a year.

We looked at the B Pound recently and gave you areas to sell if you did you made a huge profit with low risk and we have done separate report on the BP – here we want to look at the Yen and Euro and low risk /high reward trading scenario. Lets look at these currencies [...]

You’ll read a lot about the advantages of trading currencies - yet most traders tend to turn advantages into disadvantages - due to a lack of understanding. That’s why 95% of currency traders lose money - and there’s one thing in particular that wipes out more trader equity than anything else – volatility! Most forex [...]

If you want to enjoy forex trading success then you need to know how to deal with volatility and that means knowing and understanding standard deviation, - if you don’t know what it is you should it’s a key part of forex education and vital to achieve Forex trading success. The Problem Most forex Traders can spot [...]