Asymmetric Volatility Phenomenon - AVP

  

Categories: Metrics, Stocks, Econ, Investing

This very real "phenomenon" refers to how much more volatile (hard to predict, less stable, basically wild and crazy) markets are when declining, as opposed to rising. One explanation is behavioral psychology...when the economy starts to struggle, people start selling off stock abruptly and with more panic than numerical logic, fearing it might drop even lower than it already has.

Basically, when stock prices start to vary, and people start to panic, it spreads like panic in a crowded theatre after someone hollers "Fire!"

Meanwhile, when stocks are going up, people can get unreasonable about it (that's how bubbles form), but they do so in a more orderly way. There's less chance that people will start tripping over themselves to get into a place than to get out of it.

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Finance: What is Market Manipulation?2 Views

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Finance allah shmoop What is market manipulation All right people

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Ah sleazy hedge fund trader guy with a huge friendly

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smile has been shorting shares of a vaguely known tech

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name Thingamabob thingamabob Dot com Yeah that's it and yeah

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even they don't know what this thing does Well heggie

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mk sludge is betting the shares will go down soon

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and he'll profit from the short sale Well they aren't

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going down so he's panicking Well he just jumps into

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action calling with a disguised voice a bunch of financial

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journalists who have next to no training in finance He

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whispers to them about fraud in the reporting of the

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books of thing He finds an ident him to a

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cod ical to an addendum on page four hundred eighty

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two on their filings from their uh who's becca stan

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office And then he whispers money laundering being unschooled in

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hungry for a headline The journalists have no idea what

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to dio who to call to actually get a real

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reading on this issue S o they do what most

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financial journalist d'oh which is just vomit letters on their

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blogged writing about potential fraud at this thing All right

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Well about eight seconds after the headlines start hitting the

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tape well and they come from a four different journalists

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So those headlines must be accurate right Well things doc

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it's cut in half Heggie mix sludge covers is short

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by buying back the shares he shorted and he makes

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a fortune and the market has been perfectly manipulated illegally

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Yeah you can't do this people This is not legal

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and it's just one illustration of tons of market manipulation

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schemes out there Other schemes Well today an obvious one

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lives inside all the social media world where fake news

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can be planted anonymously with few if any repercussions for

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the violator if you can even find him Another more

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nefarious scheme involves collusion of that quote respected unquote wall

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street sell side analysts who when filled with truckloads of

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negative data about a company voluntarily given to him by

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heggie mk sludge is finally swayed under the promise and

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boss pressure of massive commission revenues from that hedge fund

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teo write something negative That is if the sell side

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analysts will only accede and write a very highly critical

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report of the company confirming at least a few points

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Made by the hedge fund that things were not so

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rosy While then the remaining legions of wall street penguins

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will all follow suit jumping into the waters of cell

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mortimer cell they'll crater the stock and let the hedge

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fund make a fortune again covering his short Well the

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same goes in the other direction of course with a

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little whisper that well google wants to buy them for

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one hundred eighty two dollars a share I heard this

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in the the restroom there well in the real world

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there's a close knit club of market manipulators you know

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birds of a feather and they all tend to live

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eventually right here f y i visiting hours are from 00:03:04.368 --> [endTime] ten to four tuesdays and fridays

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