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Historical Volatility

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Wall St falls on lingering worry over stimulus cuts
Reuters  2 hrs ago  Comment 
U.S. stocks fell on Wednesday, with the Dow tumbling more than 100 points on a wildly volatile day as traders extended a selloff driven by concern about the winding down of central banks' stimulus measures.
Volatility is back!
CNNMoney.com  3 hrs ago  Comment 
Volatility and fear are back with a vengeance on Wall Street.
Traders blame Bernanke for recent volatility in markets
Resource Investor  5 hrs ago  Comment 
Since falling sharply in April, gold has swung either side of $1,400 an ounce, with the gold price falling as low as $1,337 and as high as $1,478. Silver has also oscillated.
"Tug of War" in Gold and Silver, "Blame Bernanke" for Recent Volatility in Markets
FX Street  9 hrs ago  Comment 
Quick Take: Market Swings Make Happy Traders
TheStreet.com  4 hrs ago  Comment 
Morning markets: looming Wasde keeps crop markets in check
Agrimoney.com  Jun 12  Comment 
Hope Or Hype: Are Recent Market Rallies For Real?
Forbes  7 hrs ago  Comment 
First the stock market soared to new all-time highs. Then came the word that home prices had just posted their first double-digit annual gain since 2006. Are the boom times back for stocks and real estate? Certainly, recent gains are a sign of...
Market Snapshot: Stocks sink; Dow’s longest loss streak this year
MarketWatch  8 hrs ago  Comment 
U.S. stocks dive on Wednesday, with the S&P 500 index down for a third day, as the dollar declines against the yen and uncertainty about U.S. monetary policy is keeping investors on edge.
Asian shares hit 2013 lows, Nikkei volatile on BOJ jitters
Reuters  Jun 12  Comment 
Asian shares hit fresh 2013 lows and Japanese stocks had another volatile session on Wednesday, extending a broad rout in global equities, as the lack of new steps from the Bank of Japan to quell tumult in the domestic bond market and lingering...




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This article is part of WikiProject Definitions. Consider editing to improve it. View articles referencing this definition.
 
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Waseem Alim

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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