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Volatility

Volatility		The magnitude of price (or yield) changes over a predefined period of time. The amount by which an underlying instrument fluctuates in a given period of time. Also, the gross price movement over a specified period of time given a minimum value unit.
Additional comments: Options often increase in price when there is a rise in volatility even if the price of the underlying doesn't move anywhere. Volatility is a primary determinant in the valuation of options. There are two main types of volatility: historical and implied.

Related Terms
		Volatility Stops Monitoring implied volatility is critical in long neutral delta trading. Check the current volatility of the ... Vega The sensitivity of an option price to volatility. Typically, options increase in value during periods of ... Historic Volatility Calculated by using the standard deviation of underlying asset price changes from close-to-close of trading going ...

 

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