How to make volatility your friend

How to make volatility your friend

Differences in the volatility cycles of earnings and that of market prices often give useful information to investors, if they are watching closely

February 08, 2023 / 09:25 AM IST

There are many reasons for volatility of prices to deviate from business earnings. Maybe it is belief of a different macro environment. (Representative image)

The term “volatility” finds unique use in Indian stock market lingo. I am not aware of any other market where “volatility” is so frequently referred to by market participants. In India, it stands for corrections/crashes many a time. Indian TV channels when describing markets on a day as having gone up or down (even a 50 point move in the Nifty) term them as “volatile” markets.

However, volatility in its universal sense refers to a move away from trend –…

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