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Volatility
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A statistical measure of the tendency of a market price or yield to vary over time. Volatility, usually measured by the variance or annualized standard deviation of the price, rate, or return, is said to be high if the price, yield, or return typically changes dramatically in a short period of time. Volatility is one of the most important elements in evaluating an option, because it is usually the only valuation variable not known with certainty in advance. See also Risk.
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