Volatility implies that stock prices are moving and fluctuating; their prices are unpredictable and inconsistent. High volatility is therefore demonstrated by extremes in the stock market, which can often lead to higher risk, impulsive investor behavior, and an overall feeling of uncertainty. On the other hand, low volatility reflects investor confidence in the market. Trading ranges remain narrow and prices seem to correlate with the real value of a stock’s worth. When conditions are stable, the act of buying and selling haphazardly is pretty much non-existent.
