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Glossary · Stock basics

Volatility

How much a price swings around, usually stated as a yearly percentage.

Why it matters

Volatility is the size of the typical move, not its direction. A 30% yearly volatility means a one standard deviation move over a year of about 30%.

How to read it

Daily move ≈ yearly volatility ÷ 16. A stock with 32% volatility moves about 2% on a normal day.

Related

Implied volatilityThe yearly volatility that today’s option prices imply. Higher IV means pricier options.Historical volatilityHow much the stock actually moved, measured from recent daily closes and stated yearly.BetaHow much a stock tends to move when the whole market moves.

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