Glossary · Options

Historical volatility

How much the stock actually moved, measured from recent daily closes and stated yearly.

Why it matters

Comparing implied (expected) with historical (actual) volatility shows whether options look cheap or rich next to what the stock is really doing.

How to read it

IV ÷ HV under 0.85: options look cheap. Over 1.2: rich, unless an event is coming.

Also called: HV, realized volatility

Related

Implied volatilityThe yearly volatility that today’s option prices imply. Higher IV means pricier options.

In the Cluenex app, this explanation opens next to every historical volatility figure, with the live reading for the stock you are looking at. Open it in Cluenex