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
Historical volatility is a statistical measure of the dispersion ... 
Vega
The measurement of an option's sensitivity to changes in the ... 
Standard Deviation
A measure of the dispersion of a set of data from its mean, calculated ... 
International Beta
Better known as "global beta", international beta is a measure ... 
Inverse Volatility ETF
An inverse volatility ETF is a financial product that allows ... 
VIX  CBOE Volatility Index
The ticker symbol for the Chicago Board Options Exchange (CBOE) ...

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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 >> 
Implied Volatility
Implied volatility is an important concept in option trading. Learn how it is calculated using the BlackScholes option pricing ... Read Answer >> 
What is the formula for calculating beta?
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Is volatility a good thing or a bad thing from the investor's point of view, and ...
Learn the basics of volatility in the stock market and how the increased risk provides greater opportunities for profit for ... Read Answer >> 
Can delta be used to calculate price volatility of an option?
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What does a mutual fund's beta coefficient measure?
Evaluate the risk associated with a particular mutual fund by determining its beta coefficient, which illustrates the fund's ... Read Answer >>