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NGL - Risk Management Term: Volitility
What is Risk Management? - Volatility
The term volatility describes the rate and extent to which the price of a commodity such as propane changes or moves over time. Prices are often unpredictable and are influenced by many factors beyond the fundamentals of supply and demand or the actions of a single supplier.
For a company buying propane volatility can have a significant effect on profitability and cash flow as inventory is purchased at one point in time at one price and sold at a different point in time at a potentially different price.
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NGL - Risk Management Term: Volitility
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