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10 least volatile days of the year (Stock Market Volatility)

Last Updated on 10 February, 2024 by Rejaul Karim

1. The last day of the year – The last day of the year is usually the least volatile day of the year due to the fact that investors tend to be in a “wait and see” mode, as the tax year is coming to an end.

2. The first day of the year – January 1st is usually the second least volatile day of the year as investors are typically waiting to see what the market will do before they make any big moves.

3. The second Sunday in January – The second Sunday in January is typically the third least volatile day of the year as investors tend to wait for the third Monday in January, which is the first full day of trading for the year, to make any major decisions.

4. The third Monday in February – The third Monday in February is typically the fourth least volatile day of the year as investors tend to wait for the end of the month to make any major decisions.

5. The second Sunday in March – The second Sunday in March is typically the fifth least volatile day of the year as investors tend to wait for the third Monday in March, which is the first full day of trading for the month, to make any major decisions.

6. The third Monday in April – The third Monday in April is typically the sixth least volatile day of the year as investors tend to wait for the end of the month to make any major decisions.

7. The second Sunday in May – The second Sunday in May is typically the seventh least volatile day of the year as investors tend to wait for the third Monday in May, which is the first full day of trading for the month, to make any major decisions.

8. The third Monday in June – The third Monday in June is typically the eighth least volatile day of the year as investors tend to wait for the end of the month to make any major decisions.

9. The second Sunday in July – The second Sunday in July is typically the ninth least volatile day of the year as investors tend to wait for the third Monday in July, which is the first full day of trading for the month, to make any major decisions.

10. The third Monday in August – The third Monday in August is typically the tenth least volatile day of the year as investors tend to wait for the end of the month to make any major decisions.

What is volatility

Volatility in the stock market is a measure of the amount of uncertainty or risk associated with the size of changes in a stock’s value. It is typically measured by calculating the standard deviation of the annualized returns over a given period of time. Volatility can either be measured by using historical prices over a specific period, or implied volatility, which uses options prices to estimate future volatility.

Volatility can be a beneficial factor for traders and investors who are looking to take advantage of short-term price movements. However, it can also be a challenge for long-term investors as it can have a negative impact on their portfolios. When the market is volatile, it can cause prices to swing wildly in both directions, leading to significant losses for investors who don’t have a well-thought-out trading strategy.

In general, stocks with higher levels of volatility offer higher potential returns but also come with greater levels of risk. Investors should consider the level of volatility when deciding which stocks to invest in and how much to invest. If the level of volatility is too high, investors may want to consider a more conservative approach in order to minimize losses. On the other hand, if the level of volatility is low, investors may want to look for stocks that offer higher potential returns in order to maximize their returns.

History of volatility in trading

The history of volatility in the stock market is a long and complex one. Volatility can be defined as the rate of change in a security’s price over a certain period of time. The stock market has seen a variety of volatility levels throughout its history, with some periods being more volatile than others.

In the early days of the stock market, before the Securities and Exchange Commission was created, there was very little regulation and the markets were highly volatile. Prices could swing wildly with large gains and losses occurring in a single day. This lack of regulation resulted in a great deal of speculation, leading to high levels of volatility.

The Great Depression of the 1930s saw the stock market plummet to new lows. Volatility was extremely high, with the market losing over 90% of its value. Many investors were wiped out and the economy was in shambles.

The post-war boom of the 1950s saw the stock market stabilize, with lower levels of volatility. The SEC was established and stock market regulations were put in place to help protect investors. This stabilized the market and led to a period of relative calm.

The 1970s and 1980s saw a period of increased volatility, as the markets were affected by a number of external factors. The 1973 OPEC oil embargo and the 1979 Iranian Revolution resulted in a sharp rise in oil prices, which had a major impact on the stock market. The 1980s saw a number of market crashes, including the 1987 Black Monday crash, which saw the Dow Jones Industrial Average drop 22.6% in one day.

The 1990s and early 2000s saw a period of relative stability in the stock market. The dot-com bubble of the late 1990s saw the market experience a sharp rise in prices, followed by a crash in 2000. This crash was followed by a period of low volatility as the markets recovered.

Today, the stock market is still subject to volatility. Political and economic events, such as the 2008 financial crisis, can have a major impact on the markets. In addition, technological advances, such as high frequency trading, have made the markets more volatile and unpredictable.

FAQ

What are the least volatile days of the year in the stock market?

The least volatile days include the last day of the year, January 1st, the second Sunday in January, the third Monday in February, the second Sunday in March, the third Monday in April, the second Sunday in May, the third Monday in June, the second Sunday in July, and the third Monday in August. Investors often exhibit a cautious approach during these periods.

Why are certain days less volatile in the stock market?

These days are less volatile due to investor behavior. On the last day of the year, investors adopt a “wait and see” mode as the tax year ends. Similar cautiousness is observed on the first day of the year and on specific Sundays and Mondays, as investors await market developments before making significant decisions.

What role does technology play in current stock market volatility?

Technological advances, particularly high-frequency trading, have increased market volatility. These advancements have made markets more unpredictable and susceptible to rapid price changes. Events related to technology, such as market crashes or disruptions, can contribute to volatility.

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