Volatility
- Japanese
- ボラティリティ
- Last reviewed
- September 24, 2026
This is a draft, shown for review before publication.
Volatility is a measure of how much an asset's price moves, expressed as the standard deviation of its returns. It is usually quoted as an annual percentage. There are two kinds: historical volatility, calculated from past prices, and implied volatility, backed out from option market prices.
Related terms
Explained in detail
Pages that use this term
- Random Walks and Brownian Motion
- Introduction to Stochastic Calculus (Ito's Lemma)
- Option Basics: Calls and Puts
- Option Payoffs and Profit/Loss
- Put-Call Parity
- Option Strategies
- Overview of Exotic Options
- Barrier Options
- Digital Options
- Basket Options
- Quanto Options
- Caps and Floors
- Swaptions
- Overview of Exotic Rate Products
- Bermudan Swaptions
- Callable Swaps
- CMS Spread Options
- Range Accruals
- FX Options
- FX Option Market Conventions
- FX Barrier Options
- Target Redemption Forward (TARF)
- Power Reverse Dual Currency (PRDC)
- Equity Index Options
- Warrants
- Overview of Exotic Equity Products
- Variance Swaps and Volatility Swaps
- Worst-of Options
- Cliquets
- Autocallables
- Inflation Caps and Floors
- Volatility Products such as VIX Futures
- Exchangeable Bonds (EB)
- Callable Bonds and Early Redemption Features
- Binomial Trees
- Risk-Neutral Valuation
- The Black-Scholes Model
- The Greeks
- Implied Volatility
- Volatility Smiles and Surfaces
- The Black and Bachelier Models
- Collateral and Discounting
- ISDA SIMM: The Standard Model for Initial Margin
- The Hull-White Model
- The LIBOR Market Model (LMM)
- The SABR Model
- Local Volatility Models
- The Heston Model
- Model Calibration
- Monte Carlo Simulation
- Finite Difference Methods
- Adjoint Algorithmic Differentiation (AAD)
- Delta Hedging
- Managing Gamma and Vega
- Hedging Exotic Products
- Volatility Trading
- Sensitivities: DV01, Vega and Key Rate Sensitivities
- Value at Risk (VaR)
- Expected Shortfall
- Stress Testing
- Backtesting
- Exposure Measures: CE, PFE, EE/EPE and EAD
- Exposure Profiles by Product
- P&L Attribution
- Daily Valuation and P&L Sign-Off
- Daily Risk Management Operations
- Front-to-Back System Architecture
- Market Data Management
- Trading System Types and Vendor Examples
- Japan's Fair Value Measurement Standard
- Independent Price Verification (IPV)
- The Standardized Approach for Counterparty Credit Risk (SA-CCR)
- The Collapse of LTCM