Volatility come in two types, namely:
1. Historic volatility: this is the yearly standard deviation of a product’s price. The more it goes up and down in price, the higher the measure of volatility becomes.
2. Implied volatility: since volatility is a measure of risk, it is used to input models to price options. Therefore if the option pricing formula is reworked, you can calculate the volatility from an option’s market price.
Latest posts by James Rabinovich (see all)
- Top 5 Movies About Wall Street and Finance - May 29, 2023
- What Are Green Bonds And How Do They Work? - April 28, 2023
- Top 3 Companies For The Hydrogen Future - March 30, 2023
Leave a Reply
You must be logged in to post a comment.