Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail
Investing Answers Building and Protecting Your Wealth through Education Publisher of The Next Banks That Could Fail

Hardening

What it is:

Hardening refers to stabilization or steady increases in a price level.

How it works (Example):

Financial instruments and derivatives frequently experience volatile market-price fluctuations. Hardening is the process of market prices gradually returns to a normal levels following a period of instability. Likewise, an item that experiences steady long-term gains rather than abrupt short-term price escalations is described as hardening

Why it Matters:

Hardened securities and derivatives tend to experience smaller day-to-day fluctuations and are often attractive to investors, because they become easier to predict and have a decreased level of risk.