Stock prices can go up, down or “sideways” (stay about the same over time). Typically, long-term investors buy stocks in the hopes that prices of the stocks they own will increase as companies grow and enhance their profits.

Short-term “traders,” or “swing traders,” who are more interested in a stock price movement reaching their goals in only few days or weeks, can make money if a stock goes up, or they can profit by “selling short” shares of a stock, benefiting if a stock price drops.

Regardless of whether a trader is positioned to be successful if a stock price goes up or down, nothing happens unless a stock’s price moves in one direction or the other. In these cases, the stock should have some degree of “volatility.”

To learn more, watch this video.

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