Thursday, August 2, 2007

Volatility In Stock Markets

For some days, stock markets across the world are facing volatility due to subprime mortgage problems in the U.S., yen carry trade un-winding because of strenghting of yen against the dollar, re-adjustment of risk due to sharp rise in the price of crude oil which is hovering above U.S.$75 mark for the past 2 weeks. Hedge funds which love to play the stock and currency markets with leveraged money are facing problems due to adverse movements in certain asset prices against their bet, this is also leading to volatility in the system.