The rate of change in value in a company share price. Internet stocks are particularly volatile, rising and falling rapidly, and sometimes doubling or halving in value in the space of weeks or even days.
Volatility is a measure of the amount by which an asset has fluctuated, or is expected to fluctuate, in a given period of time. Assets with greater volatility exhibit wider price swings and their options are higher in price than less volatile assets. Volatility is not equivalent to BETA.
The degree to which underlying gold prices change from day-to-day. Uncertainty in the market (such as the aftermath of September 11th), tends to increase the level of price volatility, while market holidays and inactive financial markets tend to lead to a reduction in volatility.
The statistical measure of the price variation of an instrument. An instruments volatility rating is a calculation of how volatile an instrument is by calculating how much its performance is divergent from the normal pattern.
The volatility of the value of a share represents the amount of variation in the share price. The most volatile shares are those with the largest variations in value of their share price and they are therefore the most risky investment.
see also Standard Deviation; Implied Volatility) In finance, a statistical measure of dispersion of a time series around its mean; the expected value of the difference between the time series and its mean; the square root of the variance of the time series. Yield Curve For a particular series of fixed income instruments such as government bonds, the graph of the yields to maturity of the series plotted by maturity.
Statistical term to quantify the dispersion of variables such as rates or prices around the mean. A measure of the variability of the price of an underlying financial instrument, rate, commodity, or currency. Volatility only measures the quantity of the change - not the direction. Volatility is not influenced by the direction of the change; it does not matter whether the price rises or falls.
Volatility (variability, inconstancy): This term characterizes a degree of variability of an exchange rate during the certain period of time. For example, when in the market there are sharp fluctuations of a rate with big amplitude then the volatility is said to high.
The magnitude and frequency of changes in a securityâ€™s value within a short period. The more volatile an investment, the higher its risk and potential return. Volatility is usually measured by calculating the annualized standard deviation of daily change in price.
How quickly the price of a security rises and falls over time. A highly volatile share can be risky for short-term investors who stand a greater chance of buying at a peak and selling in a trough at a loss.
A measure of the variability (but not the direction) of the price of underlying instruments. It is defined as the annualized standard deviation of the natural log of the ratio of two successive prices.
Volatility is a measure of the variability of returns over a chosen time-period. It reveals the extent by which the daily/weekly/monthly price changes from the average. A low percentage volatility shows that the price has stayed quite close to the average whereas a high percentage volatility shows that the price has moved up and down a lot over the time-period. So volatility is a market measure of uncertainty â€“ investors keep changing their minds as to the value of the share, which reflects uncertainty surrounding the companyâ€™s future profit potential. As such, it's an excellent indicator of investment risk.
A measure of the amount by which an underlying is expected to fluctuate in a given period of time. Volatility is a primary determinant in the valuation of options premiums and time value. There are two basic kinds of volatility, implied and historical (statistical). Implied volatility is calculated by using an option pricing model (Black-Scholes for stocks and indices and Black for futures). Historical volatility is calculated by using the standard deviation of underlying asset price changes from clos e to close trading going back 21 to 23 days.
The degree to which financial instruments or markets are subject to market fluctuations. Volatility is measured by an annualised Standard Deviation of the underlying. The two most common methods of assessing volatility levels are Historical and Implied Volatility. The volatility level is a main factor influencing option premiums. In the bond markets, volatility refers to modified duration.
Degree of variation in a share's price. Stocks which react strongly to market trends are highly volatile. For the investor, this means the possibility of making fast and attractive gains, but also the risk of making equally fast and dramatic losses.
It is a measure for the fluctuation range of the underlying price. The greater the volatility, the higher the option price. The historic volatility is based on past data. It is often expressed as a percentage and computed as the annualized standard deviation of the percentage change in daily price. The implied volatility corresponds with the expectation of the market participants about the future volatility of the underlying which is reflected in the current option price.
The variability often measured by standard deviation of movements in a security's price. The sensitivity of one variable to changes in another, e.g. the change in a bond's price with respect to changes in the redemption yield. In bond management the term is often interchangeable with modified duration.
A measure of the extent to which prices move. If the price of an underlying asset moves to a greater extent than before, its volatility is said to have increased and vice versa. So far as options are concerned, as volatility increases, the risk to the options writer also increases and the premium will rise.
Variability; fluctuation. In investing, the range of outcomes for a given investment over a period of time. The smaller the range of an investment's returns, the lower the investment's volatility, and vice versa. One of the most common measures of investment risk.
An indication of risk measured by calculating the standard deviation of the fund's monthly returns over the time period. The higher the figure, the greater the variability in the fund's performance. (see Beta )
characteristic of an issue to rise or fall sharply within the short term. Calculated by the following formula: 1- Get Price Relatives = price on day / price on day x-1 2- Calculate log of each Price Relative and Sum all logs? (Log (price on day x / price on day x-1)) 3- Calculate the mean of the range of price relatives? (Log (price on day x / price on day x â€“ 1)) / # price relatives 4- Calculate the sum of the square of each price relative? ((price on day x /price on day x-1)2) 5- Volatility is: Square Root (253*(sum of the squares or price relatives (# of price relatives(mean of the logs of price relatives)2)) / # of price relatives
Frequent changes in interest rates, or the anticipation of frequent changes in interest rates. Since large drops in interest rates can cause MBS to prepay and to underperform other fixed income instruments, MBS generally perform better than other securities in a low volatility environment. Interest rate derivatives can be used to hedge the risks associated with changes in actual or anticipated volatility.
The variability of prices of securities over a period of time. The more the price of a security fluctuates, the greater is the volatility of that security. Securities with the greatest... read full article
This describes the fluctuations in the price of a stock or other type of security. If the price of a stock is capable of large swings, the stock has a high volatility. The pricing of options contracts depends in part on volatility. A stock with high volatility, for example, commands higher prices in the options market than one with low volatility. Volatility may be gauged by several measures, one of which involves calculating a security's standard deviation. Stock investors sometimes prefer to measure a stock's volatility versus that of an index, such as the Standard & Poor's 500 Index. This is known as a stock's beta. A beta of 1.2 implies a stock that is 20% more volatile than the S&P 500. When the S&P rises 10%, the stock is expected to rise 12%.
A measure of fluctuation in the market price of a security. A volatile stock or fund has frequent and large price swings. Statistically, the measure most commonly used for volatility is "standard deviation," the amount the price of a stock or mutual fund varies over time.
a measure of the variability of a market factor, most often the price of the underlying instrument. Volatility is defined mathematically as the annualised standard deviation of the natural log of the ratio of two successive prices. The actual volatility realised over a period of time (the historical volatility) can be calculated from recorded data. Volatility is one of the variables that must be specified in the Black-Scholes model of option pricing: a vanilla option will cost more when volatility is high than when it is low. However, volatility is the only one of these variables whose value must be estimated. The estimate used (known as the implied volatility) can be derived from the prices of options in the market and the known input variables. However, the Black-Scholes model also assumes that volatility is constant, which is not true. New techniques have been developed to cope with volatilityâ€(tm)s variability, including mean-reverting models (such as Garch) and stochastic volatility models.
The increase or decrease in an asset's price over time. High volatility means wide price changes that can occur in a relatively short period of time, while low volatility refers to smaller, or more gradual fluctuations.
This describes the fluctuations in the price of a stock or other type of security. If the price of a stock is capable of large swings, the stock has a high volatility. The pricing of options contracts depends in part on volatility. A stock with high volatility, for example, commands higher prices in the options market than one with low volatility. Volatility is measured by an alpha factor, for example, a stock with a 1.4 alpha is regarded as one whose price will rise by 40% in a year. Also: a measure of the volatility of a security relative to an entire market, such as the Standard & Poor's 500 Index, is known as the security's beta or beta coefficient.
The degree of fluctuation in the value of a security, mutual fund, or index, volatility is often expressed as a mathematical measure such as a standard deviation or beta. The greater a fund's volatility, the wider the fluctuations between its high and low prices.
The variability of a portfolio's returns from one period to the next. Typically, a more volatile portfolio will decline more during bear markets and increase more during bull markets. Volatility is expressed mathematically by the standard deviation. Reducing portfolio volatility can be positive in two ways: 1) it makes the pain of a market decline less, and 2) it will actually cause wealth to grow faster than in a higher volatility portfolio with the same mean rate of return.
A measure of the fluctuation in the market price of the underlying security. Mathematically, volatility is the annualized standard deviation of returns. See the sections in 'Options' which describes implied and historical volatility.
the tendency of financial markets to change abruptly at the whims of investors. As national control over financial markets fall as a result of capital account liberalization and the volume of portfolio investment skyrockets, volatility is increasing in financial markets. While unstable markets are profitable for speculators (see 'speculation'), the real economy can not function properly when exchange rates are fluctuating wildly and capital is flowing in and more often out, of a country in tidal waves.
This refers to the measure of the currency's expected fluctuation over a given time period based upon historical fluctuations. This is typically calculated by taking the historic annual standard deviation of daily price changes. Future prices help to determine implied volatility, which is used to calculate option premiums.
Accepted by academics and financial planning practitioners as a representation of risk, expressed statistically as the standard deviation, which analyzes the fluctuation of returns of an investment around an average. Also defined as the tendency of a security or market to fluctuate in price.
One of the major factors in deciding an options worth. The degree to which the underlying price tends fluctuate over time. Historical volatility can be calculated by looking at price fluctuations over a specific period in the past. Implied volatility can be implied from option prices observed in the market place. This is achieved by using the Black-Scholes Equation, or one of its derivatives to calculate an option volatility which gives the current market option price. Historical and implied volatility can be used to estimate the price of OTC options.
Measure of the risk of an investment, fund or portfolio. In most cases, it is expressed as the annualised standard deviation of the changes in the value of the investment over time. A high (low) volatility indicates a high (low) investment risk. See "Risk".
See on: Wikipedia Investopedia This term characterizes a degree of variability of an exchange rate during the certain period of time. For example, when in the market there are sharp fluctuations of a rate to the big amplitude, then the volatility is high.
A measure of the amount by which an underlying security is expected to fluctuate in a given period of time. Generally measured by the annual standard deviation of the daily price changes in the security, volatility is not equal to the Beta of the stock.
The price fluctuations of a security or mutual fund relative to an appropriate market index. The more volatile a security or mutual fund, the more it is subject to rapid and extreme price fluctuations relative to the market.
An annualized measure of the fluctuation in the price of a futures contract. Historical volatility is the actual measure of futures price movement from the past. Implied volatility is a measure of what the market implies it is, as reflected in the option's price.
Volatility can be simplistically described as riskiness. More accurately volatility is a measure of the movement in a fund's monthly total return over three years compared to the average of those movements
Changes in the price of a security. Rapid, wide price swings indicate a high degree of volatility. Appears next to a unit trust or share listing in the newspaper to indicate that the fund recently paid a capital gain or dividend. This amount was previously included in the fund's net asset value and is deducted from the net asset value when it is paid out. The "x" stands for "ex-dividend".
The speed and magnitude of price changes of a security measured over a period of time. A price that often moves significantly will be considered to have a high degree of volatility. Standard deviation is the absolute measure of volatility and is the measure of the square root of the variance of the fund's returns from the mean over specified regular measurement periods. (See also: Standard Deviation)
In general, a measure of the uncertainty of the amount by which the price of the underlying instrument is expected to fluctuate in a given period of time. Generally expressed in annualized percentage terms as a standard deviation of the daily price changes in the underlying instrument. Volatility, as described, is calculated from both historic prices for the underlying instrument, as well as the implied volatility resulting from a theoretical option pricing model given all normal input variables (except volatility) plus the premium amount.
The frequency and rate of change of an instrument. Often used as a theoretical measurement of risk. Volatility can be calculated statistically. Implied volatility is that given by the prices of options.
A measure of risk based on the standard deviation of the asset return. Volatility is a variable that appears in option pricing formulas, where it denotes the volatility of the underlying asset return from now to the expiration of the option. There are volatility indexes. Such as a scale of 1-9; a higher rating means higher risk.
A type of risk associated with investing, particularly in stocks or the stock market in general. It refers to the fact that some security prices will rise and fall more rapidly over short periods of time.
A measure of risk based on the standard deviation of the asset return. Also, volatility is a variable that appears in option pricing formulas. In the option pricing formula, it denotes the volatility of the underlying asset return from now to the expiration of the option. Some have created volatility indices. Here is an example, scale is 1-9; higher rating indirectly higher risk.
1. A statistical measure of the tendency of a market or security to rise or fall sharply within a period of time. 2. A variable in option pricing formulas that denotes the extent to which the return of the underlying asset will fluctuate between now and the expiration of the option.
Usually defined as the standard deviation of returns of an asset. Volatility generally refers to the magnitude of price movements in a specific asset. Large price movements are said to be more volatile and vice versa. Volatility has a major direct influence on option premium levels. When volatility is high, premiums increase (all other assumptions remaining the same). When volatility is low, premiums decline.
Volatility is an indicator of expected risk. It demonstrates the degree to which the market price of an asset, rate, or index fluctuates from average. Volatility is calculated by finding the standard deviation from the mean, or average, return.
The tendency of security returns or prices to fluctuate in a random, unpredictable manner. Called historical volatility when derived from past movements. Called implied volatility when estimated from the market price of options.
Refers to the tendency of prices/variables to fluctuate over time. It is most commonly measured using the coefficient of variation (the standard deviation divided by the mean). The higher the volatility, the higher the risk involved.
The tendency of an investment to experience price swings (ups and downs) over periods of time due to fluctuations in the market. Beta is a measure of the relative volatility of a stock to the overall market.
The tendency of crude or products to yield vapor. Volatile materials give off gas at everyday temperatures. Hydrocarbon mixtures, such as motor gasoline, may qualify as volatile because they contain components which evaporate readily. The industry usually measures vapor pressure to determine crude and products' volatility.
Volatility associates the risk of holding a security to a duration of time. The volatility of a stock measures the tendency for that security to move drastically in the market for that period of time. Less volatile stocks are more stable while the opposite, more volatile stocks, are less stable.
The potential of positional equity to change. High volatility means that the equity could change substantially after the player's or the opponent's next roll. Volatility is a consideration in doubling decisions.