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Adding the % Range column to a watchlist

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DanielaIG

  • You can now add % Range to a watchlist on the web trading platform
  • % Range is the difference between the high and low quotes of the session divided by the current mid price
  • This can be used to show a relative volatility on the asset and its potential trade opportunity
  • % Range has a number of advantages over % Change and Range in points

How to add % Range

A new function added to the web trading platform is % Range, a measure of volatility that will enable you to sort the markets in your watchlists by price range movement. To add this functionality to a watchlist, click on the three lines that are positioned on the top left-hand corner next to the word 'Market', where a drop down menu will appear. Click on the % Range buttons to activate it.

2018-11-30 15_23_10-IG Trading Platform _ Spread Betting.png

 

What is % Range?

This indicator is intended to indicate the price range a product has had during the trading session and is calculated in the following way:

% Range= (High price – Low price) / Mid price

By dividing the range (the difference between the high and the low prices) by the mid-price (the current market value of an asset) the value we get is a how much the range of the trading session is over the mid-price, as a percentage. The higher the figure, the higher the volatility during the trading session, and potentially a greater opportunity to take advantage of price movements.

If the price has seen little movement, the highs and lows will be close together, meaning that the difference between the two will be small and will represent only a small percentage of the mid-price. If, on the contrary, the range for the trading session is very wide, the value will represent a higher percentage of the mid-price, therefore indicating that there has been higher volatility.

 

Advantages of % Range over % Change and Range

  • % Change tells you the current difference in price as a percentage over the closing price of the previous day.
    • It is a good measure to understand where the current price stands in regard to where it closed in the previous session.
    • However, if a certain asset experienced high volatility during the session but then came back to where it closed the previous day, it will not give any insight of the volatility it has experienced.

 

  • Range is a good measure of volatility, but the amount of points between the high and low price can be more or less significant depending on the price of the product.
    • For example, a 200 point range is not the same for a market priced at around 400 than to a market priced around 12000.
    • % Range overcomes this as it factors in the price of an asset by brining it's mid-price into the equation. The lower the mid price, the more significant price movements will be.

 

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