Come affrontare la volatilità

Inflation fears on the one hand and geopolitical tensions on the other have caused a lot of uncertainty among investors, with market crashes followed by euphoric sessions.

It's well known that volatility creates opportunities in the markets, and it's precisely at these times that many investors, especially novices, are drawn by the possibility of "easy" profits. However, we know that it's precisely in these situations that great opportunities arise, but also great risks , and therefore risk management becomes essential. Very often, losses are caused by irrational decisions that take over precisely when volatility increases.

We frequently find ourselves answering questions like: Is it possible to exploit volatility? How can we manage risk? Which instruments are best suited in periods of high volatility?

Let's try to answer starting from the most important needs for a trader in particular conditions of volatility, analyzing the characteristics of one of the financial instruments in our opinion most complete,:

• First of all, it is not trivial to operate 24 hours a day. We know that market movers can arrive at any time, even at night, so it is important to be able to enter the market quickly (with one click!) even before the stock exchanges open.
• You can set a stop loss to limit losses in the event of a negative market, but even if you don't, you don't have to worry because each certificate has its own knockout that, whatever happens, will limit your maximum loss to your initial investment. And you can choose it.
• If you open a long  position on the Nasdaq100 today, you'll automatically know that your maximum loss represents the premium paid. If negative news hits the markets overnight and the index price rises above your knockout level, your position won't be closed until the underlying asset opens, which is at the US stock market open tomorrow. This allows you to stay in the game if the market rebounds during the morning and the Nasdaq price rises above your knockout level before the US stock market opens, an unprecedented advantage.
• With this volatility, it's often the case that we find ourselves with a sharp gap down on Mondays when the markets open, after the weekend close. Opening a short position on Friday allows you to both speculate, while keeping the risk of maximum losses under control, if the markets open with a gap down on Monday and ride the wave, and to hedge your portfolio if you have long positions open and don't want to risk finding them significantly devalued on Monday. All this without paying commissions if you exceed €100 in value.
• Flexibility. If you're looking for exposure without time or size limits, You can adjust your position without having to worry about margin, choosing the premium that best suits you.
• Speaking of risk, you'll be the one to choose your leverage . Want to ride the wave quickly? You can do so with higher leverage. Looking for broader exposure or unsure about market developments? You can trade with lower leverage.

Interested in volatility trading?

You can start your stock trading business now.

Open a real account or test yourself with a demo account on IG in just a few steps:

1. Create an IG account or log in to an existing account
2. Enter the name of the product you want to trade in the search bar
3. Choose the size of your position
4. Click on “buy” or “sell” on the platform
5. Confirm the operation

Open a real account or try the demo to practice.