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Glossary

What is Volatility?

Volatility is how bumpy a stock's price ride is.

The simple explanation

A volatile stock swings up and down a lot, sometimes in a single day. A calm stock moves slowly. Higher volatility means bigger possible gains and bigger possible losses.

An example

A stock that moves 5 percent most days is more volatile than one that moves half a percent.

Why it matters

Knowing how bumpy a stock is helps you decide whether you can stomach its ride.

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Related terms

Educational information, not financial advice.