What is 'Volatility'
Volatility is a statistical measure of the dispersion of returns for a given security or market index. Volatility can either be measured by using the standard deviation or variance between returns from that same security or market index. Commonly, the higher the volatility, the riskier the security.
2. A variable in option pricing formulas showing the extent to which the return of the underlying asset will fluctuate between now and the option's expiration. Volatility, as expressed as a percentage coefficient within optionpricing formulas, arises from daily trading activities. How volatility is measured will affect the value of the coefficient used.
BREAKING DOWN 'Volatility'
In other words, volatility refers to the amount of uncertainty or risk about the size of changes in a security's value. A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, but changes in value at a steady pace over a period of time.
One measure of the relative volatility of a particular stock to the market is its beta. A beta approximates the overall volatility of a security's returns against the returns of a relevant benchmark (usually the S&P 500 is used). For example, a stock with a beta value of 1.1 has historically moved 110% for every 100% move in the benchmark, based on price level. Conversely, a stock with a beta of .9 has historically moved 90% for every 100% move in the underlying index.
Ready for more brain power on volatility? Read A Simplified Approach to Calculating Volatility and The ABCs of Option Volatility.

Historical Volatility  HV
The realized volatility of a financial instrument over a given ... 
Beta
Beta is a measure of the volatility, or systematic risk, of a ... 
Volatility Arbitrage
Trading strategies that attempt to exploit differences between ... 
Implied Volatility  IV
The estimated volatility of a security's price. 
High Beta Index
An index composed of companies with high betas trading on the ... 
TimeVarying Volatility
Fluctuations in volatility over time. Volatility is the standard ...

Markets
3 Cases When Beta Does Not Measure Volatility of Stocks
Examine the theoretical and statistical relationship between beta and volatility to identify three factors that limit beta's explanatory value. 
Markets
3 Reasons to Ignore Market Volatility (VIX)
If you can keep your head while those about you are losing theirs, you can make a nice return in roiling markets. 
ETFs & Mutual Funds
5 Ways To Measure Mutual Fund Risk
These statistical measurements highlight how to mitigate risk and increase rewards. 
Markets
Roller coaster 2016 for Stocks? Exploring Global Stock Volatility
Find out how much volatility global equity investors are in for during 2016 by seeing how much they've experienced over the past five years. 
Trading
Understanding Beta
Beta is a measure of volatility. Find out what this means and how it affects your portfolio. 
ETFs & Mutual Funds
Smart Beta: Do Low Volatility ETFs Make Sense?
Do low volatility ETFs have a place in client portfolios as either core or satellite holdings? 
Managing Wealth
Volatile Stocks: Great, If You Have The Stomach
Volatile stocks can be a lucrative opportunity for shortterm traders. For buyandhold investors, it's a much different story. 
Investing
How Investment Risk Is Quantified
FInancial advisors and wealth management firms use a variety of tools based in Modern portfolio theory to quantify investment risk. 
Trading
Tips For Investors In Volatile Markets
Find out what to look out for when trading during market instability. 
ETFs & Mutual Funds
PRHSX: T. Rowe Price Health Sciences Fund Risk Statistics Case Study
Examine the risk metric of the T. Rowe Price Health Sciences Fund. Analyze beta, capture ratios and standard deviation to assess volatility and systematic risk.

What is the best measure of a given stock's volatility?
Understand what metrics are most commonly used to assess a security's volatility compared to its own price history and that ... Read Answer >> 
How is correlation used to measure volatility?
See how the correlation between an asset and its benchmark index can be used as a proxy to determine the relative volatility ... Read Answer >> 
How does beta measure a stock's market risk?
Learn how beta is used to measure risk versus the stock market, and understand how it is calculated and used in the capital ... Read Answer >> 
How does my insurance company determine what premiums I have to pay for coverage?
Learn about some of the quantitative finance measures that investors without a strong math background can use in analyzing ... Read Answer >> 
How does implied volatility impact the pricing of options?
Learn about two specific volatility types associated with options and how implied volatility can impact the pricing of options. Read Answer >> 
What is an option's implied volatility and how is it calculated?
Learn what implied volatility is, how it is calculated using the BlackScholes option pricing model and how to use a simple ... Read Answer >>