Glossary

In finance, volatility is the degree of variation of a trading price series over time as measured by the standard deviation of returns.

Historic volatility is derived from time series of past market prices. An implied volatility is derived from the market price of a market traded derivative (in particular an option). The symbol σ is used for volatility, and corresponds to standard deviation, which should not be confused with the similarly named variance, which is instead the square, σ².