Volatility
How much a price moves around over time, usually measured as the standard deviation of returns. High volatility means larger swings in both directions, not a direction of travel.
Also called volatile · implied volatility
How much a price moves around over time, usually measured as the standard deviation of returns. High volatility means larger swings in both directions, not a direction of travel.
Why it matters
Volatility is often used as a proxy for risk, but they are not the same thing: a steadily declining asset can be low-volatility and still lose money.
Related terms
- Drawdown
- Beta
- Sharpe Ratio
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