Options Glossary

Glossary: Beta

Last Updated: July 12, 2015



What Does Beta Mean in Options Trading?

Tags: Liquidity

It is a numerical value that indicates the fluctuations in the stock price of an individual security when compared with the overall stock market.
Stock with a beta higher than 1.00 is considered to be more volatile than the overall market, and therefore riskier. A stock with a beta lower than 1.00 is expected to rise or fall slower than the market, and therefore less risky. Investors would be happier to take greater risks to maximize their profits when the market rises more steadily.

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