Knowing that, it's obvious volatility, as well as daily range, is an important consideration for day-traders. If a market is volatile, it may be a good candidate for day-trading even if its daily range is lacking. But when volatility increases, so does slippage, which means lost opportunity. Another strike against volatility is that to take advantage of it, you must make more trades. And that means paying more commissions, Greenberg says.
Commissions are a very large part of the day-trading equation.
But despite the risks of slippage and commissions, market professionals agree volatility definitely is a plus for the day-trader. There's more opportunity where there's volatility. Volume and open interest are quantifiable aspects of a market that measure its activity and level of participation, but other aspects, such as activity of the locals and the intraday amount of commercial participation, are hard to put a finger on, particularly for the upstairs trader. Some traders contend certain markets, such as energies, precious metals and some softs, are dominated by groups of floor traders who make it difficult for upstairs traders to get decent fills intraday. Floor traders, of course, don't have a vendetta against off-floor traders, they simply are looking out for their own interests.