Do you view daily economic and financial news and wonder if things could get any worse? As of the final quarter of 2021, most of the world's major economies are in deep trouble. Inflation appears to be more permanent than anyone thought it would be, unemployment projections get worse by the day, and the price of private homes has reached new highs as the supply of new houses has stalled. Add to that continuing COVID-related financial ills like a worker shortage in nearly every industry, the worldwide supply chain crisis, grocery stores that can't keep staples in stock, and more. Things are not looking good for any sector or geographic region of the international economic scene.

So why are so many individual traders and investors optimistic about their ability to earn short-term profits? The answer is summed up in one word: volatility. It's a fact of the markets that wild price swings play directly into the hands of people like day traders and others with short-time profit scenarios. If you can make an educated guess about the direction of tomorrow's or next week's prices, then you hold a major advantage over those who get spooked by volatility and park their assets in cash accounts.

Major indices are in a bubble zone

Most of the major securities indices are currently in a bubble zone, which means they're showing extremely high volatility for prices across the board. However, many institutions, individuals, and brokers look to the volatility 75 index to see how the S&P 500 is performing, in terms of price stability. When the VIX is between 12 and 20, most agree that the markets are generally in a non-volatile zone. Once the VIX hits 20, it's usually safe to say that the entire marketplace is experiencing unpredictable price swings. A value above 30 tends to indicate widespread panic. During the last week of October, the VIX rose from 15 to 17.3, a range that is veering extremely close to that key milestone of 20. Short-term investors prefer volatility because it allows them to play the ups and downs of the daily charts.

The economy is ailing

Indices aside, the economy as a whole in currently in a dire mess. Led by several awful scenarios in the US, the UK, and Asia, unemployment, inflation, and supply chain crisis are combining to create a perfect storm of financial ailment. When so many key pieces of the monetary and labor puzzle are malfunctioning, short-term investing gains lots of new fans. The main reason is that too many individuals and institutions fear locking up their capital in weak corporate shares, so they either convert their portfolios to cash and cash equivalents, or take profits on short time-frame transactions.

Opportunities abound

What if you could use an instrument like CFDs (contracts for difference) or options to earn handsome returns on one day or one week chart fluctuations? In fact, some people wait for volatile economic times to start putting their money on the line. They aim to bet on movement in both upward and downward directions, and have the potential to make money whether the chart line rises or falls. For those who trade that way, the final quarter of 2021 presents multiple opportunities.

China's troubles won't end soon

China's central economy is on the verge of imploding. Recently, China banned cryptocurrency altogether, and now a massive real estate crisis is threatening to reverse what gains the nation has made in the past decade. Betting on continued troubles for Chinese corporations and government backed shares could be a sound method of speculation for late 2021 and early 2022.

Inflation could continue to wreak havoc

Inflation does nearly the same thing to an economic system that a global pandemic does to physical health. It's pernicious and has a way of damaging everything it touches. That's just one reason economists and financial journalists lament, on a daily basis, the past summer's creeping inflation that has turned into a long-term situation.

How does inflation, a force that's nearly universally negative, work to buoy the spirits of trading and investing enthusiasts? For starters, it almost guarantees several more months of uncertainty, instability, and wild swings in the securities markets. As noted above, this roller coaster effect is music to the ears of many who enjoy playing the ups and downs, picking strategic entry points, and scalping off small profit’s day after day. If inflation stick around through the end of 2021, expect all the major indices to remain in high volatility zones.

Disclaimer: The information provided in this article is being provided solely for educational and marketing purposes and should not be construed as investment, tax or legal advice.