Ratings are calculated using the Glicko-2 rating method developed by Mark Glickman. This is a very popular rating method, and is used by a significant number of chess organisations (FIDE being a notable counter-example, as they still use the dated Elo rating system).Fundamentally, Glicko ratings use “confidence intervals” when calculating and representing your rating. When you first start using the site, your rating starts at 1500 ± 700. The 1500 represents your rating, and the 700 represents the confidence interval.
Basically, the system is 90% sure that your rating is somewhere between 800 and 2200. When a player is just starting out, their rating estimate will change very dramatically, potentially several hundred points at a time. After some games against established players the confidence interval will narrow, and points gained/lost per game will decrease.
Another point to note is that, as time passes, the confidence interval will increase. This allows you to gain/lose points points more rapidly to match any changes in your skill level over that time.