|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.
Some stocks are very stable while others are very volatile. The more volatile the stock, the more options will cost because the more likely it is that a trader might make money. Volatility is measured by the beta factor—you need a stock with a high beta in order to get the options to fluctuate in value, and if they don’t fluctuate it is almost impossible to trade them.
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.
The sensitivity of an option price to volatility. Typically, options increase in value during periods of ...
A means of measuring the volatility of a security or portfolio of securities in comparison with ...
Monitoring implied volatility is critical in long neutral delta trading. Check the current volatility of the ...
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