Historical Volatility

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Wall Street Journal  3 hrs ago  Comment 
The options market, which traders and investors use to shield themselves—or profit—from swings in exchange rates, shows that investors expect a sharp rise in sterling’s volatility against both the euro and the U.S. dollar.
Motley Fool  5 hrs ago  Comment 
A combination of two key variables could mean wild swings for the stocks of these three companies.
The Hindu Business Line  6 hrs ago  Comment 
Volatility is inherent in markets. An active trader has to learn how to deal with it. If you ask a typical trader what volatility is, he is most likely to say, “it’s the up-down movement of the ma...
The DIV-Net  Mar 15  Comment 
The Berkshire Hathaway annual letter to shareholders was released this past Saturday. Now, this is somewhat of an event all in itself for capitalists all around the globe. Even if you’re not a shareholder of  Berkshire Hathaway Inc. (BRK.B) ,...
The Economic Times  Mar 14  Comment 
Disappointing consumer inflation numbers dampened the market sentiment last week, and all eyes would now be on WPI data for February.
TheStreet.com  Mar 13  Comment 
NEW YORK ( TheStreet) --The DJIA, S&P 500 and the Nasdaq were all down for this week and down for the third week in a row. The Russell 2000 was the only index up on the week. The DJIA lost 145.91 points on Friday, well off its lows on the...
Benzinga  Mar 13  Comment 
Joel Elconin is the co-host of Benzinga's #PreMarket Prep, a daily trading idea radio show. Mobileye NV (NASDAQ: MBLY) shares were trading higher by $1.17 (3 percent) at $41.57 in Friday's session. The catalyst for the rally is an upgrade from...
Yahoo  Mar 13  Comment 
Short shocks to markets could occur frequently, the Bank of England said, as investors are warned to pay attention to trading in volatile times.
MarketWatch  Mar 13  Comment 
Despite the first rise in gasoline costs since last summer, U.S. producer prices fell in February for the fourth straight month, mainly because of a sharp drop in volatile category of retail trade margins. The producer price index declined by a...




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Volatility refers to the tendency of prices to change unexpectedly, usually as a response to new information or changes in demand for the investment. Volatility can be defined as an investment's tendency to move up and down in price over the latest n periods.

A security with high volatility has bigger fluctuations in price compared to a security with low volatility. The more quickly a price changes up and down, the more volatile it is. As such, volatility is often used as a measure of risk.

For example: A stock whose price went up 10% yesterday and went down 25% today is more volatile than a stock which increased 2% in both days.

Historical volatility is calculated by looking at past changes in stock price. The standard deviation of percentage changes in price is used to calculate observed volatility within the considered timeframe.

Historical Volatility, which looks at the past, is distinct from Implied volatility, which represents expectations about future fluctuations in price and is calculated by looking at the prices of options on the underlying investment.

Volatility is also different from Beta, which is a measure of how the stock price reacts to changes in a broad market index, such as the S&P 500.


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