Historical Volatility

Benzinga  1 hr ago  Comment 
Michael Rich was recently a guest on #PreMarket Prep, a daily trading idea radio show hosted by Joel Elconin and Dennis Dick. Rich said that his strategy for trading within the first hour of the market's open can be even more profitable on...
Benzinga  4 hrs ago  Comment 
Speaking to Benzinga, TD Ameritrade Chief Strategist JJ Kinahan indicated that options trading on ConAgra Foods Inc (NYSE: CAG) was very limited with 146 contracts having traded by Monday morning. Kinahan noted that the stock had traded in the...
TheStreet.com  6 hrs ago  Comment 
NEW YORK (TheStreet) -- Markets lost their bottom by the afternoon session Wednesday in volatile trading amid uncertainty over the Federal Reserve's rate plans.  The S&P 500 dropped 1%, the Dow Jones Industrial Average fell 1.2%, and the...
MarketWatch  7 hrs ago  Comment 
Twitter's stock has climbed 37% over the last three months—but it’s been a volatile year.
TheStreet.com  8 hrs ago  Comment 
NEW YORK (TheStreet) -- The volatility index just triggered a rare buy signal, meaning now may be a good time to invest in VIX-tracking ETFs for big gains. To fully understand how this works, allow me to go over a few basics. The CBOE...
Financial Times  12 hrs ago  Comment 
Bond market volatility to persist while questions on rates remain
Equitymaster  Mar 25  Comment 
Posted by Equitymaster        Indian share markets fluctuated around the dotted line in the post-noon trading session. Among sectoral indices, the most noticeable upward movements have been witnessed in the FMCG and Healthcare sectors...
The Economic Times  Mar 24  Comment 
The "super-low" long-term interest rate in many sovereign markets worries John Lipsky, former acting managing director of the International Monetary Fund
Financial Times  Mar 24  Comment 
US stocks and the dollar see volatile trade as markets digest economic figures


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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