Glossary Background

High Volatility Stocks

High volatility stocks are shares that experience significant fluctuations in their price over a short period of time, often more than other stocks in the market. The volatility could stem from various factors, such as the company’s fundamentals, industry-specific events, or broader market conditions. Investors often seek high volatility stocks for potential higher returns, but they also come with increased risk. Some common indicators used to identify high volatility stocks include: - Average True Range (ATR): Measures market volatility by calculating the average range between the high and low prices over a set period. - Bollinger Bands: A volatility indicator that shows the relative high or low of a stock’s price compared to its moving average, with the bands widening during high volatility and contracting during low volatility. These tools help traders and investors assess the potential price movement of a stock.