Volatility
Volatility measures how much a security's price moves over time.
Implied volatility is derived from options prices — it reflects the market's expectation of future price swings. Historical (realised) volatility measures actual past price movements. The VIX index measures 30-day implied volatility on S&P 500 options and is often called the 'fear gauge'.
Higher volatility means a wider range of possible outcomes. For options buyers, volatility is a tailwind (options are worth more when outcomes are uncertain); for holders of the underlying stock, volatility is uncomfortable but not inherently a loss — prices can move up as well as down.
Beta (market-relative volatility) is a related concept, but volatility can be measured in absolute terms regardless of what the market does.
Further Reading
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