Why Too Much Volatility is a ProblemIn the FX space, lower volatile currency pairs offer less surprises, and are suited to position traders.High volatile pairs are attractive for many day traders, due to quick and strong movements, offering the potential for higher profits, although the risk associated with such volatile pairs are many. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Essentially, volatility describes the nature of an instrument’s fluctuation a highly volatile security equates to large fluctuations in price, and a low volatile security equates to timid fluctuations in price. In finance, volatility refers to the amount of change in the rate of a financial instrument, such as commodities, currencies, stocks, over a given time period. However, in Q2 2022, the cash trading revenue shot up 7.4% to €75.3 million as a result of “higher volumes due to sustained market volatility Similarly, Euronext recorded jumps in its cash, derivatives and fixed income activities.Īfter the first quarter, or in April, these markets crashed across the board on a month-over-month basis. However, the jump was almost 20% when compared year-over-year. The volume came in at more than $510 billion. The exchange reported a marginal increase of 0.2% in spot forex trading volume.
In June, Euronext's spot forex trading remained flat in line with the industry trend. “On a like-for-like basis at constant currencies, FX trading revenue was up +12.8% in Q2 2022 compared to Q2 2021.” “Over the second quarter of 2022, average daily volumes of US$23.6 billion were recorded, up +27.0% compared to Q2 2021. The revenue rose from $18,617 million in 2020 to $23,639 million last month.Įuronext explained, “Euronext FX trading volumes and revenue benefited from the continued positive momentum started in Q1 2022 with heightened volatility. Meanwhile, the exchange saw a corresponding 27.6% jump in its average daily volume revenue from spot forex trading during the second quarter of 2022. During the first quarter of 2022, the revenue came in at €7.2 million, which was higher than the €6.1 million for Q1 2021.
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