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Historical Volatility

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Facebook options debut a wild card for volatility
Reuters  May 25  Comment 
Investors can hope the debut of options on Facebook Inc goes more smoothly than the long-awaited debut of the social networking service's stock on May 18.
Investing with a Target Volatility Approach
The Market Financial  May 25  Comment 
Since I mentioned one of my favorite ETP sites earlier today [the more I think about it, the more I have come around to the idea that the Best Post of the Year on Exchange-Traded Products may be the best post I have ever seen on the subject] I...
Riskier assets hit hard by global volatility
Reuters  May 25  Comment 
NEW YORK, May 25 (IFR) - Macroeconomic concerns are weighing on lending and investment in riskier asset classes, causing more than $2.6 billion of high-yield bonds and leveraged loans to be cancelled or postponed this week.
Volatility 'Has Pushed Nearly All North American Shale Gas Operators Closer To The Brink Of Failure' (CHK, DVN, EOR, APC)
Clusterstock  May 25  Comment 
T. Boone Pickens is not the only one lamenting the state of the natgas industry.  While record-low prices have been a boon for consumers, producers have been devastated, according to a Dutch industry expert. “With output continuing to...
Investing in Low Volatility Stocks and ETFs
Investment U  May 25  Comment 
As a financial writer, I am regularly inundated with friends and family members who ask two familiar questions... Investing in Low Volatility Stocks and ETFs
Wall Street dips on more Europe woes
Reuters  May 25  Comment 
U.S. stocks dipped at the open on Friday as fresh warnings about Greece kept investors away from risky assets while trading was expected to be volatile and light throughout the day heading into a long weekend in the United States.
Evonik to go ahead with €3bn-€5bn IPO
Financial Times  May 25  Comment 
Chemicals producer confident despite volatile markets, a previous delay, and a timetable that encompasses the run-up to Greece’s elections on June 17
UPDATE: Goldman Sachs Cuts PT to $56 on VeriFone Systems on FX Volatility
Benzinga  May 25  Comment 
Goldman Sachs lowers its price target on VeriFone Systems (NYSE: PAY) from $63 to $56, but reiterates its Buy rating on shares. Goldman Sachs notes, "Following reported 2QFY12 results we have adjusted our model to reflect better constant...
The move coincided with a similar spike in EUR/CHF
FX Street  May 25  Comment 
On Thursday, trading in EUR/USD showed again quite some intraday volatility. That said, the losses... For more information, read our latest forex news and reports.




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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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