What is Volatility?

An integral part of financial data analysis is analysing market sentiment. The prices of assets traded on the market will move dynamically on a daily basis.
Volatility is used in option pricing formulas to gauge the fluctuations in the returns of the underlying assets and It helps measure the risk of a security.
The easiest way to calculate the volatility of a security is to calculate the standard deviation of its prices over a period of time.
"This can be done by using the following steps:
Daily Volatility Formula:
Annualized Volatility Formula:"
It is important to remember that a volatile market does not always mean that the investor will face heavy losses. It’s just a high-risk situation, which can be leveraged by investors in their own favour.
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