Volatility - Senthil Kumar
Volatility - Senthil Kumar
Volatility - Senthil Kumar
It is used to quantify the risk of the financial instrument over the specified time period. Volatility is normally expressed in annualized terms, and it may either be an absolute number ($5) or a fraction of the mean (5%).
TYPES
of a financial instrument over a specified period starting at the current time and ending at a future date (normally the expiry date of an option).
needed at a specific future date, higher volatility means a greater chance of a shortfall.
Price volatility presents opportunities to buy assets
Measures
There are several used measures of volatility, some
examples:
has a current value near 10,000, has moved about 100 points a day, on average, for many days. This would constitute a 1% daily movement, up or down.
V o l a t h " .
Volatility is a poor measure of risk, as explained by Peter Carr, "it is only a good measure of risk if you feel that being rich then being poor is the same as being poor then rich".