Historical Volatility

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Benzinga  9 hrs ago  Comment 
There are different kinds of reports released on a monthly schedule that can be traded. Expectation of volatility or Implied Volatility can inflate leading up to these news events affecting option pricing, which can provide trade opportunities....
Mondo Visione  10 hrs ago  Comment 
The OFR released its latest Financial Markets Monitor today. The monitor says the United Kingdom's vote to leave the European Union was the defining focus of financial markets in the second quarter. Although the immediate market volatility has...
Forbes  Jul 14  Comment 
To try and get a handle on Musk, the man, the visionary, the cranky CEO, I tracked down two people who used to work for him and were willing to talk. In part because of Musk?s volatility, they spoke to me on background only. Here is what they said.
Benzinga  Jul 14  Comment 
Low volatility exchange-traded funds are garnering plenty of attention this year, but investors should note the advantages of the low volatility factor are not confined to U.S. borders. That reminder is particularly important post-Brexit, as some...
The Economic Times  Jul 14  Comment 
The good news for Asia is that three weeks after the Brexit vote, its markets are on a firm footing. In some ways, its investment landscape looks strikingly similar to the first half, with attractive stock markets and high-yielding bond markets.
The Economic Times  Jul 14  Comment 
In FY16, the company turned around after making a loss Rs 1 crore in FY15. They were impacted in the past because of oil price volatility.
New York Times  Jul 14  Comment 
City officials have tightened security plans for handling what is expected to be a volatile atmosphere surrounding the nomination of Donald J. Trump.
Forbes  Jul 13  Comment 
In the few weeks since the United Kingdom decided to leave the European Union, market volatility has clouded investors’ hopes for a calm summer in the capital markets. With plummeting bond yields, a dismal pound and a global selloff in the...
Reuters  Jul 13  Comment 
REUTERS - Indian shares ended unchanged on Wednesday, pausing after two sessions of gains that drove indexes to near 11-month highs, as investors opted for caution ahead of quarterly results.




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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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