volatility limit
[/vɑːˈlætɪləti ˈlɪmɪt/]
nounpl: volatility limits
limite de volatilidade
1. A maximum threshold or boundary set by a stock exchange or regulatory body on the price fluctuations of a security or market index within a specific time period, designed to prevent excessive volatility and protect investors
The stock exchange imposed a volatility limit to halt trading when the index fell more than 7% in a single day.
A bolsa de valores impôs um limite de volatilidade para interromper as negociações quando o índice caía mais de 7% em um único dia.
2. In derivatives and options trading, a constraint on the implied volatility parameter used in pricing models to ensure realistic valuations
The trading firm programmed a volatility limit into its algorithmic system to prevent extreme option pricing anomalies.
A empresa de negociação programou um limite de volatilidade em seu sistema algorítmico para evitar anomalias extremas no preço das opções.
Volatility limits are critical regulatory mechanisms in both Brazilian (B3) and American (NYSE, NASDAQ) financial markets, particularly following major market crashes. In Brazil, these measures gained prominence after market turbulence in the 1990s and 2000s. They represent the intersection of market protection and investor confidence, with trading halts serving as automatic 'circuit breakers' to allow market participants time to reassess during extreme price movements.
Related Idioms & Phrases
circuit breaker triggered
hitting the volatility limit
breaching volatility thresholds
Look up more words on Fala2Me
The free English-Portuguese dictionary with real Brazilian accents, NYC slang, conjugator and more
Open Fala2Me →