Volatility refers to how much and how quickly stock prices change within a certain period. Think of volatility as the stock market's mood swings. On some days, stock prices might stay calm and change very little, but on others, they might jump up and down dramatically. High volatility means there are bigger price swings, and things can feel a bit unpredictable, whereas low volatility means things are steadier and calmer.
What causes market volatility?
Market volatility can be caused by various factors such as geopolitical developments, changes in monetary policy, news, market cycles, and earnings releases. Generally, larger companies are less prone to market volatility compared to smaller companies that are more susceptible to such fluctuations.