Meaning
Understanding volatility is key to assessing risk in financial markets.Definition
Volatility refers to the rate at which the price of a security or market index increases or decreases over a given period. It’s a measure of price fluctuation.Measurement & Interpretation
It’s often measured by standard deviation. High volatility implies greater price swings, indicating higher risk and potential for significant gains or losses.Types & Implications
Implied volatility (derived from options prices) and historical volatility (based on past data) are common types. High volatility can deter conservative investors.Author
