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What Is Volatility?

Volatility refers to the size of changes in the price of an asset. In a more technical sense it is a measure of the deviation of returns for a given asset. If an asset is very volatile then its price is likely to change a lot. The measure of volatility provides no indication as to the direction of change, merely the amount.

Related Terms

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  • Straddle
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  • Why might a deep in the money call have a very low implied volatility? Don't deep in the money options tend to have a higher implied volatility due to the fear of extreme events? Why might an ITM put have a high implied volatility? Does this indicate people are bearish on the underlying?
    Why might a deep ITM call have a very low implied volatility?
  • During my time with Big 4 audit I have seen companies pretty much determine volatility to be whatever they like when computing stock-based compensation.
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    Volume gone, volatility flat - so what does everyone think can solve this?
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  • does anybody have a shipping model or any idea where i can get info on how these companies are...
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  • I was wondering how computer-savvy ( leaving aside Excel/PowerPoint skills) you need to be to do well in consulting? Assuming you have an assignment where you need to help a company improve its IT Strategy, are you screwed if you dont know how to code or if you havent taken ANY CS classes in...
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This is the reaction any analyst who has ever worked in banking has when you say you want to leave banking for business school then come back as a post b school associate... <img src="http://epicpinterestfail.com/wp-content/uploads/2012/11/how-i-met-your-mother-barney-why.gif"...
Why You DON'T Leave Banking for B School Just to Come Right Back...
Inspired by comments from this: http://www.wallstreetoasis.com/forums/basic-guide-ramping-up-on-a-company-with-public-information-part-1-of-3 Lets just jump in. <strong>Technology:</strong> In this space there are really two metrics that matter the most, sales growth and EPS...
Beginners Guide to Valuation and Metrics By Sector
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For better or for worse, there’s a very unique feeling when everything goes completely according to plan yet nobody seems to care or notice. Such is the case with our favorite company of the moment, Tesla Motors. For those unaware, TSLA has rocketed upwards since its Q1 earnings release,...
A Perfect Storm
I work as a long/short equity analyst at a large hedge fund. I've been lucky enough to be more than just a model monkey early on in my career, but have also been exposed to the stress of being measured on returns. I primarily cover consumer and TMT names. I went the typical path (target...
I'm a Hedge Fund Analyst - Ask Me Anything
Fellow Primates, We are looking for 1-2 students on each campus to help WSO in its sales efforts to student clubs/career centers, and overall promotion at your school both online and on the ground. Below is a description of the position and benefits...thanks in advance for your help! <a...
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<em>Mod note: Best of Bankerella - this was originally posted 10/1/12</em> I occasionally get PMed by people at colleges I’ve never heard of before, asking if they have a shot at IBD. Folks, why IBD? The finance world is broad and varied, and there are a million ways to...
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