What it means
Variation is not a forecast
Volatility describes price movement; it does not tell a user which direction the price will move next. Measurements depend on the asset, time period, market and calculation, so an unsourced single figure can be misleading.
Payment exposure
When an order is priced in one currency but paid or held in another asset, changes in relative value can affect proceeds, refunds and future obligations. A business should define valuation times, quote expiry and conversion policy. A stablecoin’s target value reduces neither every market fluctuation nor every issuer or liquidity dependency.
Related concepts
In practice
A concrete example
A merchant sets an expiry for a crypto quote and separately decides how long to retain received assets before converting them.
Technical notes & boundaries
Lower observed volatility is not proof of a risk-free asset. Conversion and hedging can introduce costs and other risks.
Go to the source.
Original references used for this definition. Product details and standards can change.
