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Decoding the Stock Market: The Vocabulary of Volatility

Matthew Frankel, CFP, The Motley Fool
Decoding the Stock Market: The Vocabulary of Volatility

When the stock market is making large up and down moves on a regular basis, you may hear that we're in a "volatile" market, but what does that mean? While the word volatility is often used to describe general stock market action, or big movements in a certain stock, there's quite a bit more to the concept of volatility than that. A more specific definition of the word volatility when it comes to the stock market is how large the price movements of a stock or index have been (or are expected to be).