On Monday, January 24, the Central bank of Russia was forced to halt purchases of foreign currency in an attempt to stop a tremendous plunge in the stock market and the value of the ruble. Monday afternoon, the Russian currency was down 2.3% against the U.S. dollar, and traded at 79.3 at one point. The Central Bank decided not to purchase foreign currency on the domestic market … from 15:00 Moscow time as part of its efforts to reduce the
volatility
Volatility
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. 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. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. 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. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
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. 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. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. 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. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term of financial markets.
Russia’s Central Bank reached the decision as Russian markets were in near-freefall, with thousands of billions of dollars wiped from the value of the nation’s biggest firms amid increasing fears of a potential Russian invasion of Ukraine.
NATO allies have warned that a Russian invasion of Ukraine could occur. Countries such as the US, the UK and Australia, have begun partial evacuations of their embassies in Kyiv, the Ukrainian capital. Additionally, more Western countries have advised their citizens not to travel to Russia or Ukraine. As a result, the Russian stock market dropped 10% at one-point on Monday. The market witnessed massive losses when it traded 7% down during afternoon trading in Moscow. The equities market has now lost 30% of its value since late October when Russia’s military buildup started.
The Central Bank did not give a timeframe for when it would resume the purchases of foreign currency. The regulator said that it would be guided by the situations in the financial markets.
Tensions are increasing over Russia’s deployment of 100,000 military troops at Ukraine’s borders. The European Union in consultation with the US and other allies are putting together a series of sanctions against Moscow as they hope that such actions will help discourage Russia from any military action. Russian
equities
Equities
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Read this Term are expected to experience losses throughout the rest of this month because of an increase in geopolitical tensions.
Efforts to Safeguard Financial Stability
The announcement by the Central Bank of Russia comes at a time when the regulator is executing its role to maintain optimal monetary stability within the economy. Early this month, the Central Bank issued a complete ban on crypto assets, citing them as ‘volatile and widely used in illegal activities’, and a threat to citizens’ wellbeing, the country’s financial stability and the sovereignty of its monetary policy. In the recent past, the Central Bank announced plans to collect information from commercial banks concerning certain private money transfers, including details of users who traded in cryptos both in the country and abroad. Although Russia gave legal status to cryptocurrency in 2020, it has already outlawed accepting crypto coins as a means of payment in exchange for services and goods. Meanwhile, the regulator is working to launch its own digital currency (CBDC) which it regards as the future of banking in the country.
On Monday, January 24, the Central bank of Russia was forced to halt purchases of foreign currency in an attempt to stop a tremendous plunge in the stock market and the value of the ruble. Monday afternoon, the Russian currency was down 2.3% against the U.S. dollar, and traded at 79.3 at one point. The Central Bank decided not to purchase foreign currency on the domestic market … from 15:00 Moscow time as part of its efforts to reduce the
volatility
Volatility
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. 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. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. 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. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
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. 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. Volatility is an important statistical indicator used by financial traders to assist them in developing trading systems. Traders can be successful in both low and high volatile environments, but the strategies employed are often different depending upon volatility. 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. Overall, a look at previous volatility tells us how likely price will fluctuate in the future, although it has nothing to do with direction.All a trader can gather from this is the understanding that the probability of a volatile pair to increase or decrease an X amount in a Y period of time, is more than the probability of a non-volatile pair. Another important factor is, volatility can and does change over time, and there can be periods when even highly volatile instruments show signs of flatness, with price not really making headway in either direction. Too little volatility is just as problematic for markets as too much, we uncertainty in excess can create panic and problems of liquidity. This was evident during Black Swan events or other crisis that have historically roiled currency and equity markets.
Read this Term of financial markets.
Russia’s Central Bank reached the decision as Russian markets were in near-freefall, with thousands of billions of dollars wiped from the value of the nation’s biggest firms amid increasing fears of a potential Russian invasion of Ukraine.
NATO allies have warned that a Russian invasion of Ukraine could occur. Countries such as the US, the UK and Australia, have begun partial evacuations of their embassies in Kyiv, the Ukrainian capital. Additionally, more Western countries have advised their citizens not to travel to Russia or Ukraine. As a result, the Russian stock market dropped 10% at one-point on Monday. The market witnessed massive losses when it traded 7% down during afternoon trading in Moscow. The equities market has now lost 30% of its value since late October when Russia’s military buildup started.
The Central Bank did not give a timeframe for when it would resume the purchases of foreign currency. The regulator said that it would be guided by the situations in the financial markets.
Tensions are increasing over Russia’s deployment of 100,000 military troops at Ukraine’s borders. The European Union in consultation with the US and other allies are putting together a series of sanctions against Moscow as they hope that such actions will help discourage Russia from any military action. Russian
equities
Equities
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Equities can be characterized as stocks or shares in a company that investors can buy or sell. When you buy a stock, you are in essence buying an equity, becoming a partial owner of shares in a specific company or fund.However, equities do not pay a fixed interest rate, and as such are not considered guaranteed income. As such, equity markets are often associated with risk.When a company issues bonds, it’s taking loans from buyers. When a company offers shares, on the other hand, it’s selling partial ownership in the company.There are many reasons for individuals investing in equities. In the United States for example, equity markets are amongst the largest in terms of transactions, investors, and turnover.Why Invest in Equities?Overall, the appeal of equities the potential for high returns. Most portfolios feature some portion of equity exposure for growth.In terms of investing, younger individuals can afford to take on higher levels of equity exposure, i.e. risk. Consequently, these people have more stocks in their portfolio because of their potential for returns over time. However, as you are planning to retire, equity exposure becomes more of a risk.This why many investors or holders of retirement accounts transition at least part of their investments from stocks to bonds or fixed-income as they get older.Equity holders can also benefit through dividends, which differ notably from capital gains or price differences in stocks you have purchased.Dividends reflect periodic payments made from a company to its shareholders. They’re taxed like long-term capital gains, which vary by country.
Read this Term are expected to experience losses throughout the rest of this month because of an increase in geopolitical tensions.
Efforts to Safeguard Financial Stability
The announcement by the Central Bank of Russia comes at a time when the regulator is executing its role to maintain optimal monetary stability within the economy. Early this month, the Central Bank issued a complete ban on crypto assets, citing them as ‘volatile and widely used in illegal activities’, and a threat to citizens’ wellbeing, the country’s financial stability and the sovereignty of its monetary policy. In the recent past, the Central Bank announced plans to collect information from commercial banks concerning certain private money transfers, including details of users who traded in cryptos both in the country and abroad. Although Russia gave legal status to cryptocurrency in 2020, it has already outlawed accepting crypto coins as a means of payment in exchange for services and goods. Meanwhile, the regulator is working to launch its own digital currency (CBDC) which it regards as the future of banking in the country.
Source: https://www.financemagnates.com/institutional-forex/russias-central-bank-halts-ruble-plunge-as-markets-experience-freefall/