how hardening works
in commodities trading a market is said to be hardening if its prices are steadily rising at a time when volatility is relatively low for many traders a market that is hardening presents ideal conditions for trading because of the apparently calm and predictable nature of the market at such times of course for traders wishing to speculate on large movements in commodity prices a hardening market might be a negative sign as the resulting decline in volatility could make those large moves less likely to materialize this could be especially damaging for owners of options contracts set against those commodities whose value generally falls when the volatility of their underlying asset decreases while hardening is most often noted in reference to the trading conditions of commodities futures markets it is also used to refer to periods of strict underwriting or lending standards in the insurance and banking industries 