Is price volatility necessarily a bad thing?


Volatility has two sides of course, an upside (commodity or currency increasing in purchasing power) and a downside (decreasing).

When you invest in something as a store of value, you're always going to appreciate when it gains value as you hold it and dislike when it loses value.

Before you invest (EG, you have another money you're about to use to purchase it) you like when the price comes down so that you can get more of it (with the expectation of going back up again once you have it) and you dislike when the price shoots up prior to your purchase.

It is always a bad idea to price loans and contracts in a volatile currency, however. Since each party would be in a position to hope for an opposite swing direction, one party would always be inconvenienced by a change in value. Since loans and contracts are designed to offer joint utility, you don't want one party suffering or resenting the other party for their perceived unjust lucky gains: people would just...

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The increased volatility on display Tuesday, when the Dow industrials rallied as much as 282 points and fell 143, is the theme for equities in 2015.

Whether citing the Federal Reserve's pulling back on its quantitative easing, the European Central Bank adding stimulus or crude's extended decline, market analysts say the market's wild swings can be expected to continue.

"Without the Fed really acting as a consistent buyer of bonds, and the global deflation that seems to be intensifying, mainly outside our borders, we do think there are legitimate earnings concerns," Jim Russell, portfolio manager at Bahl & Gaynor, said.

"It could be any or none of those reasons, it just speaks to the fact that we came into year after five years of rallying equity prices and the market feels heavy, it is going to take a lot of push to get us into more consistently positive trajectory," Mark Luschini, chief investment strategist at Janney Montgomery Scott, said.


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Google "Donald Trump" and "nationalism" and you'll get 1,990,000 results, the large percentage of which are, to judge from the top hits, negative. "Nationalism" is deemed to be bad stuff, maybe even akin to Nazism.

But is nationalism always so bad? Not, it seems, for the millions of people around the world watching the Rio 2016 Olympics. They watch as the TV networks keep track of how many medals each nation's athletes has won — and they root for the men and women they see as representing their nation.

Americans thrilled to see Michael Phelps propel the U.S. team to gold in the freestyle relay and a 19-year-old Katie Ledecky race way ahead of the field in the 400 meter freestyle. People who watch gymnasts at only four-year intervals were amazed at the skill of the 4'9" Simone Biles.

News coverage in other countries focused on their own athletes. British front pages flashed pictures of record-breaking breast stroker Adam Peaty, mouthing the words of "God Save...

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Things are really starting to move now in the bitcoin price. Yesterday, and to some extent, the day before, action was relatively flat. This is not necessarily a bad thing. Sometimes, and especially after a period of extended movement, we need to see some flat action as price consolidates. Consolidation generally precedes a return to volatility, and that’s exactly what we’re seeing now. Price overnight moved – not substantially in one direction, but up and down – considerably, and we were given a number of opportunities to get in and out the markets according to the rules of our intraday strategy. Hopefully, during today’s European morning session, we will see more of the same. So, with this in mind, and ahead of the European session kicking off, let’s take a look at what we’re focusing on in the bitcoin price this morning, and see if we can outline some levels with which we can draw profit from the market. As ever, take a look at the chart below to get an idea of what’s on. It is...

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While European markets enjoyed a bit of rebound yesterday they didn’t really come close to reversing the Monday post Macron sell-off that came in the aftermath of Sunday’s confirmation of his winning of the French Presidency, though US markets managed to post more new record highs before slipping back in late trade.

This would seem to suggest that while markets are relieved at not having to fret any more about the prospect of a political and populist upheaval in Europe, there is some uncertainty as to whether we can go higher from here or whether we need a brief pullback first. Either way investors don’t appear to be too concerned about the risks of sharp selloffs given the low levels seen in various index volatility indicators which are sitting at multi year lows.

An improvement in economic data, better than expected company earnings updates, with the prospect that the US Federal Reserve looks set to feel confident enough about the US economy to raise rates again...

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By Joseph Y. Calhoun

The Dow Jones Industrial Average was down a bit over 100 points last week, but that hardly does justice to a week with multiple triple digit swings. Three of the last six trading days have seen a move of at least 1%, a level of volatility that must be unnerving to anyone who thought the last few years were representative of how markets usually work. Volatility actually started picking up in the middle of last year so this is merely a continuation of that trend. The source of the market's angst is, of course, the uncertainty regarding future Fed policy fed by conflicting economic data.

Volatility in and of itself isn't necessarily a bad thing as markets can continue to climb even as volatility does the same. If one takes a quick look back to the late 90s, the VIX (volatility index) trended higher from 1996 right to the end of the dotcom mania. Obviously, a rising VIX doesn't have to correspond with a lower stock market, but it does make one a bit...

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A shift occurred in the market today with 1st and 2nd month VIX futures closing in a very slight backwardation of 0.05 points, with April at 16.65 and May at 16.60 (see

data page

). While this does not necessarily mean a continued selloff in XIV, I think it is very important for anyone who has grown accustomed to the seemingly unidirectional movement in XIV to understand that gains are not always a given.

We've seen a good run -- the result of a VIX that has declined from 26.66 on 6/1/12 down to six-year lows of 11.03 in March, as well as rolling futures in a contango term structure. The result has been a staggering 200% gain over the past 9 months, and a 400% gain since 11/21/2011. It seems that money has been raining from the skies!

But remember that key drivers of VIX futures ETFs are 1) change in price of the relevant VIX futures contracts and 2) the term structure. Today we saw a shift in the flattening of the term structure which should signal a very loud...

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Have you ever wondered what the signs you're neurotic look like in real life? Even if you slept your way through psychology class in high school, you're probably aware of the five factor model (FFM) of personality — or rather, you probably know the traits themselves, which are often referred to as the "Big Five." The FFM works on the assumption that all personalities possess the same basic dimensions: extroversion, agreeableness, conscientiousness, openness to experience, and neuroticism. According to the theory, everyone's personality is unique because they combine these psychological "building blocks," so to speak, in different ways. So whenever you hear someone described as "neurotic"? Although it may just be a figure of speech, it may not be; in fact, that person might be displaying the kinds of behaviors consistent with people who score highly on the Big Five trait of neuroticism.

The traits themselves are fairly self-explanatory. To simplify things greatly,...

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sory i post here and in law forum, because i think there are similar laws in many countries:

in france law is very clear:

some compounds are illegal, you can go to jail for only having some.

but designer drugs are not really legal because you cannot sell or give a product which have similar properties as illegal compounds (hallucinogenic, stimulant, and/or relaxant), you can go to jail for giving or selling even non-active compounds, saying that they are active...
so: you can go to jail too for selling ephedrine in low quantities because it is stimulant whereas in france you can buy some pseudoeph at the pharmstore without medical order (non listed medication)
for the ephedrine: selling it in the caps saying that it comes from the pharmstore you can go to jail for 2years whereas selling it in powder, in same quantities you can go to jail for 10 years (in the 1st case you risk because you sell medication without being pharmacist, in the second case you...

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It seems my opponent and I have slightly different definitions of nationalism. I define nationalism as "The belief that nations will benefit from acting independently rather than collectively, emphasizing national rather than international goals." He defines it at its core to be "Shared national values and an identification with a single national identity" Based on proximity and language. If i have interpreted this wrong please correct me.

I would like to take an excerpt out of a wiki page here: "From a psychological perspective, nationalism (national attachment) is distinct from other types of attachment, for example, attachment to a religion or a romantic partner. The desire for interpersonal attachment, or the need to belong, is one of the most fundamental human motivations. Like any attachment, nationalism can become dysfunctional if excessively applied."(1)

My opponent argues that:

1. African liberation movements were founded on nationalist...

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Volatility means uncertainty. And if there’s one thing investors tend to worry about, it’s unpredictability.

While it’s true that in some cases a trend of market volatility can reflect perceived trouble ahead, volatile markets can also have an upside. Some investors actually love volatility, because it allows them to buy new investments on the cheap, when prices dip.

So before you panic at the next mention of market volatility, take a second to learn about what volatility actually is, how it’s measured, and how it’s tracked.

Volatility Measures Change

Broadly speaking, volatility measures the rate of deviation away from an average. In other words, experts are looking at changes in a stock’s price.

In the case of investments — stocks, bonds, ETFs, etc. — financial experts use volatility to gauge an asset’s value over a given time, compared to an average or index. The more an asset’s price moves, the more volatile it is. Generally,...

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Have you ever received a gift, beautifully wrapped and attractive to view, only to open it and find it was not what you thought it might be? The gift maintains a certain level of value that will be more accurately determined in retrospect, but the initial value is not the anticipated one. The wrap will always be beautiful, but the gift beneath the paper is more the stuff of life circumstance than the stuff of dreams come true. Such is sometimes the case of relationships following weight-loss surgery. The beautiful hope of a “new you” becomes the reality of a new you, but then something beneath the wrap of who you have become changes.

In part, the change is more an adjustment of courage or self-esteem. Prior to surgery, prior to improved health, prior to enhanced physical attraction, prior to a rise in confidence, in some instance there was a poor marriage. The relationship already had not been working for whatever period of time. So while improvements in the...

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In today’s article we are going to look at the concept of volatility. The question we are going to consider is whether or not volatility is good or bad. We seem to hear lots of talk about the market being volatile which is generally considered bad, but why would we consider it bad? Well, there are a couple of things we need to consider when determining if it is bad or not.

The first thing we want to understand is that volatility is a necessary part of trading. If there were no volatility in the market it would be untradeable. This would make it impossible to be profitable when trading. So what we need to determine is what tradable volatility is. This concept may be new to you but it is important when deciding if we want to trade a particular pair or market.

Now that we understand that volatility is a necessary thing we need to now determine if the volatility is bad or good. We will look at each individually to understand what might make volatility good or...

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Volatility in the stock market is arguably one of the most misunderstood concepts in investing. Simply put, volatility is the amount of price change a security experiences over a given period of time. If price stays relatively stable, the security has low volatility. A highly volatile security is one that hits new highs and lows, moves erratically, and experiences rapid increases and dramatic falls. Because people tend to experience the pain of loss more acutely than the joy of gain, a volatile stock that moves up as often as it does down may still seem like an unnecessarily risky proposition. However, what seasoned traders know that the average person may not is that market volatility actually provides numerous money-making opportunities for the patient investor. Investing is inherently about risk, but risk works both ways. Each trade carries with it the risk both of failure and of success. Without volatility, there is lower risk of either.

Volatility can benefit...

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Volatility in financial markets is on the upswing, with the CBOE Volatility Index (VIX), which measures expected volatility for the S&P 500 index, soaring 22 percent in the last two weeks.

"Volatility in and of itself isn't necessarily a bad thing, as markets can continue to climb even as volatility does the same," he writes in a market commentary. Indeed, the S&P 500 stands less than 3 percent from its record high.

"But it does make one a bit nervous to recognize that the last time it happened we were in the middle of a stock market mania," Calhoun explains.

And what of the future? "With an economic slowdown getting more obvious with every — or maybe every other — economic report and the continued rapid movement of the dollar and other currencies, the volatility in stocks and bonds seems likely to continue," he says.

As for reports of economic weakness, retail sales fell 0.6 percent in February, the third straight month of decline. The dollar...

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While the recent increase in volatility has resulted in some wild trading swings, the S&P 500 is down just over 2% from its closing high.

A pullback of this small magnitude is typically not met with such angst, but fears that the Federal Reserve will make a premature move and uncertainty over the election have added to investor panic.

After trading in one of narrowest ranges in decades for over a month, the odds of a big move were inevitable. It’s why we saw a sell-off last Friday, and it’s why I expect volatility to continue to spike over the next few weeks.

After spiking on September 9, the VIX (commonly known as the volatility or fear index) has been gyrating all over the place this week, showing the uncertainty in investors.

Typically, the longer a market trades in a narrow range, the bigger the breakout afterward. So while it felt ugly at the time, Friday’s major move is likely a sign of good things to come.

With several Federal...

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Managers: Guy Caplan, Bobby Richardson and Nate Brown, Raven Rock Capital
Fund: Raven Rock Credit Fund/Raven Rock Income Fund
Description: Bottom-up focus on corporate credit
Firm’s AUM: US$440-million
Performance: 1-year: 9.38%; 3-year: 11.06% (Raven Rock Credit Fund, annualized, as of May 31, 2013)
Fees: Management 1.5% (A class); Performance 20%

The portfolio managers at Raven Rock Capital utilize a strategy that thrives on price volatility, so recent market turbulence isn’t necessarily a bad thing.

The Chapel Hill, N.C.-based firm invests in a wide spectrum of credit qualities and across issuers’ entire capital structures, primarily high-yield bonds, convertible bonds and leveraged loans.

The Raven Rock Income Fund, which is offered through Toronto-based Arrow Capital Management, and the Raven Rock Credit Fund for U.S. institutional clients, are run using two sub-strategies.

The first is a directional credit portfolio,...

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Volatility: there's been plenty of it in markets recently and that's a bad thing, right? Well perhaps not always, is the simple answer to that question.

What is it? Technically, volatility is a statistical measure of the dispersion of returns for a given investment such as a share or investment fund or of an index such as the FTSE 100.

Many Arlingclose clients will be familiar with our approach which is to measure volatility by using "standard deviation". Standard deviation is the variance between returns from that security or market index average. This statistic can be seen in client benchmarking reports for those clients with strategic investment portfolios.

Volatility is a risk to an investor, just like more familiar risks such as credit risk - the good news is that volatility can be rewarding. Over time higher risk tends to equate to higher reward. For the patient investor who is able to weather volatility, the rewards can be significant. There can't be...

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