Amplitude

Think: up down, up down...the waves and troughs of the sea or those heart beepy things in the hospital that show the patient is in fact, still living. Or you can think of a bed on The Bachelor, if you are so inclined.

When measuring the amplitude of a stock, you are measuring its volatility. So you would calculate the difference in price from the midpoint of a trough (low point) to the midpoint of a peak (the highest price) in a specific period of time. The larger the amplitude in either direction, the more volatile, i.e., riskier, the security is considered to be.

Amplitude is also used to measure the direction of a country’s gross domestic product. The United States hit a major trough during the Great Recession starting in 2008, with the economy beginning to show signs of life in 2010. A trough would show the lowest point during a depression right before the economy starts to improve.