DAYRATE VOLATILITY

The unpredicted exchange rate of the day that changes because of imbalance in supplies and demands. The price of some goods or services can change rapidly because of the current market condition. Low levels of day rate volatility illustrate that the market is complacent, and the existing price is not a major concern for the transacting parties. On the other hand, a rise in day rate volatility can be used to signal fear or a lack of supply. This degree of volatility generally results in large price fluctuations, which suggests that the market is in a state of panic because there may be a larger group of sellers than there are buyers.