Volatility is measured by calculating the standard deviation of the annualized returns over a given period of time. It is a rate at which the price of a security increases or decreases for a given set of returns. Volatility is measured by calculating the standard deviation of the annualized returns over a given period of time. It shows the range to which the price of a security may increase or decrease.
Volatility measures the risk of a security. It is used in option pricing formula to gauge the fluctuations in the returns of the underlying assets. Volatility indicates the pricing behavior of the security and helps estimate the fluctuations that may happen in a short period of time.
If the prices of a security fluctuate rapidly in a short time span, it is termed to have high volatility. If the prices of a security fluctuate slowly in a longer time span, it is termed to have low volatility.
The CBOE Volatility Index, ticker symbol “VIX” in the TradeStation platform, is an index that represents a consensus expectation for the market’s annualized volatility (S&P 500 Stock Index) 30 calendar days into the future. It is also referred to as implied volatility as the expectation for future market volatility is implied by S&P 500 index option prices. The index is calculated as a weighted average of many near-term and next-term out-of-the-money SPX option prices (Calls & Puts).
On Friday (Aug-21), CBOE Volatility Index (VIX) rose +46.45% or XXX points to close at $28.03. The index was opened at $22.55 and floating between $20.80 – $28.38 in the whole trading session. Over the last 52-Weeks period, the index hit the highest point of $31.06 and $10.88 lowest point in the same period.
With the yesterday’s trade close Sunedison Inc (NYSE:SUNE) has weekly volatility of 10.25% and its monthly volatility of 11.27%. SUNE opened the day at $11.82 and closed at $10.72 with the loss of -11.40%. The stock currently has Beta of 2.91 where; Beta indicates the volatility of the security. SUNE currently has Average True Range (ATR) of 1.79 along with the Relative Strength Index (RSI) of 17.84. The company after the yesterday closing has a market capitalization of 3.38 billion.
Arch Coal Inc (NYSE:ACI) after settling the last trading session has volatility 30.48% for the month and 39.71% for the week with Beta of 1.34 (the Beta measures the volatility of the security in relation to the market). The company’s security currently has RSI (Relative Strength Index) of 67.50 and ATR (Average True Range) of 0.62. The stock closed the last trading session with market capitalization of 81.97 million and its shares got a jump of +14.93% closing at $3.80 with trading volume of 13.05 million shares.
After the last market close The Fresh Market Inc (NASDAQ:TFM) has beta of 0.45 (Beta is the single most important measure of stock risk or volatility) while the monthly and weekly volatility of the stock stands at 3.55% and 6.85% respectively. The stock has current Average True Range (ATR) of 1.35 and Relative Strength Index (RSI) of 8.93. In the last trading session TFM closed at $19.69 with a decrease of -25.95%. The company has current market capitalization of 956.96 million.