After connecting perps and options yesterday, the “now” behaviour and the “later” behaviour, I woke up still thinking about one question:
“But what decides the mood of the market itself?”
Because honestly, the market can be dramatic.
Some days it sprints like it drank a triple espresso.
Some days it moves like it’s half-asleep.
Some days it cries, laughs, jumps, and crashes, all in one hour.
I wanted to understand why these personality shifts happen.
And today, I finally found the answer:
Volatility, the market’s mood swings.
What volatility really means (the simplest version)
Volatility isn’t about price going up or down.
It’s about how fast, how big, and how wildly price moves.
Slow, steady movements = low volatility.
Big, sudden moves = high volatility.
It’s the difference between a calm morning…
and a morning where all your kids wake up hyper at the same time.
Same house. Same kids.
Different mood.
That’s volatility.
How perps react to volatility (the “now” behaviour)
Perps react instantly.
When volatility is high:
- open interest spikes
- funding rates flip around
- candles stretch tall
- liquidations fire off
- volume surges
The whole market feels energized and emotional.
When volatility is low:
- charts crawl
- funding stays steady
- trading slows down
Perps follow the mood of the moment.
They absorb the drama right now.
How options respond to volatility (the “later” behaviour)
Options don’t react to the mood of today.
They react to the mood people think might happen later.
Higher volatility means:
- more uncertainty
- more possible outcomes
- more risk to prepare for
- more rewards to price in
So option premiums rise.
Because when the future feels dramatic, the “price of insurance” goes up.
Options are the quiet planners.
Perps are the immediate reactors.
Volatility is the mood that controls them both, one now, one later.
A quick clarification for beginners
If you’re new (especially moms like me), it’s easy to mix volatility with direction.
But volatility has nothing to do with “up or down.”
It’s all about:
- speed
- intensity
- unpredictability
And yes, perps and options behave differently because they read different volatility signals, not because perps have no expiry and options do.
Expiry is structure.
Volatility is behaviour.
A Base moment that made volatility feel clearer
Since volatility is all about movement, I tried something simple today:
I moved a little USDC from MetaMask to Base, then deposited it into a DEX to watch how fast things settled while the market was jumping around.
It surprised me.
The transfer was instant.
No delays.
No “hala, ang taas ng gas.”
No stress.
Because everything settled so quickly, I could actually observe volatility without worrying if my transaction was stuck in limbo.
It felt like watching the market breathe in real time,
clear, smooth, direct.
Sometimes the easiest way to understand volatility
is to move with it.
And Base made that part feel natural.
Analogy Time, Mom Edition
Volatility is like your child’s mood swings.
Low volatility days are like when they’re quietly drawing or building Lego.
Predictable. Calm. Walang stress.
High volatility days?
You know those times when one kid is laughing, the other is crying, another one is running, and suddenly someone is climbing something they shouldn’t?
That’s high volatility.
Perps react to the chaos happening right now.
Options prepare snacks, water, toys, and energy, just in case the chaos happens later.
Once you see it this way, the market stops feeling scary.
It just feels… familiar.
Why volatility matters
Because knowing volatility helps you understand:
- why charts behave strangely
- why things move faster during news
- why some days feel intense
- why premiums change
- why traders panic
- why liquidations cascade
Volatility is the market’s emotional temperature.
And when you learn to read temperatures,
you stop being surprised by the weather.
Takeaway
Today I learned that volatility is the invisible force behind every loud pump, unexpected dump, calm morning, or chaotic evening.
It shapes perps in the moment and options in the future.
And now that I understand the mood behind the movement,
the market feels less intimidating, and more alive.
Volatility can feel overwhelming at first, but now that you know it’s just the market’s “mood,” which part do you want me to simplify next,
IV, the Greeks, open interest, funding rate, or liquidations?
Tell me, and I’ll explain it in the most mom-friendly way.
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