| Volatility | |
 1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the expiration of the option. |
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 Volatility is typically calculated by using variance or annualized standard deviation of the price or return. A measure of the relative volatility of a stock to the market is its beta. A highly volatile market means that prices have huge swings in very short periods of time. |
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 Tips For Investors In Volatile Markets - Understanding volatility and defining your own investing strategy should keep you from getting spooked. The Uses And Limits Of Volatility - Check out how the assumptions of theoretical risk models compare to actual market performance. The ABCs of Option Volatility - The mystery of options pricing can often be explained by a look at implied volatility (IV). Gauging Sentiment with the Volatility Index - Find out why more and more investors use options prices offered up by the CBOE to determine market direction. Introduction to Value at Risk (VAR) - Part 1 - Volatility is not the only way to measure risk. Learn about the "new science of risk management". |
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