The prices of a stock in a market may be up today, but the next thing
you know within five minutes they are down again. This up and down game is
always there in financial market and that is exactly what is termed as stock
market volatility.
In a layman’s language, it would be better to understand with the
example of how car insurance premiums go up if the likelihood of risk is
higher. It could be based on person’s poor driving record or based on the fact
that the person resides in an area where number of thefts is high.
There are some who say that the term volatility is just a polite way of
translating investor’s nervousness. While volatility increases, the chances of
problematic trading also on increasing trend. There are some analysts who feel
that volatility can be indicative of rebound and make room for plenty of money
making strategies.
Since volatility increases chances of risky trading, that is why
investors and traders implement risk management systems (software) in order to
cut down on the degree of risk or to at least mitigate its impact.
Dragon
Holdings AG:
This company
is located in Germany and designs algorithms for algo trading. It also designs
risk management systems that are implemented by investment banks, traders,
market makers and individual investors.
Link to
company’s website for more updates and information:
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