Timevarying volatility is a key characteristic from "summary" of Why Stock Markets Crash by Didier Sornette
Timevarying volatility is a key characteristic of financial markets that cannot be ignored. This concept refers to the fact that the level of volatility in stock prices is not constant over time. In other words, the degree of fluctuation in prices can change dramatically from one moment to the next. This inherent unpredictability is what makes financial markets so fascinating and, at times, so dangerous.
One of the reasons why timevarying volatility is so important is that it can have a significant impact on the behavior of investors. When volatility is low, investors tend to feel more confident and are more willing to take risks. However, when volatility spikes, fear and uncertainty can take hold, leading to panic selling and...
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