If you purchase overpriced premiums to leverage sharp market movements, changes in volatility may still create a losing position, even when you are right about market direction.
These supply contracts are usually made at pre-negotiated prices, allowing manufacturers to hedge movements and volatility in timber prices.
"Policy issues have joined and in many cases overly displaced corporate fundamentals in driving intraday price movements and volatility," said Mohamed El-Erian, the chief executive and co-chief investment officer at Pimco, one of the largest money managers in the world.
DealBook » "Policy issues have joined and in many cases overly displaced corporate fundamentals in driving intraday price movements and volatility," said Mohamed El-Erian, the chief executive and co-chief investment officer at Pimco, one of the largest money managers in the world.
"We continue to be wary of movements in long-term interest rates, especially undesirable spikes in volatility, and will keep up efforts to reduce that volatility," he said.
Uncertainty leads to bigger stock movement — in other words, volatility.
"As we have long stated, excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," the group said in a joint statement.
We are agreed that excessive volatility and disorderly movements in exchange rates can have adverse implications for economic and financial stability.
For their part, the richest countries, like the United States and Britain, both with large deficits, agreed to be "vigilant against excess volatility and disorderly movements in exchange rates".
"I think that exchange rates should reflect economic fundamentals, that excess volatility and disorderly movements in exchange rates have adverse implications for economic and financial stability," he said.
