Tuesday, November 25, 2008

Stock Option Terms: Historic Volatility

Historic Volatility:
Historic volatility (or statistical volatility) is a measure of the price fluctuation of an asset averaged out over a period of time. A typical period to calculate historic volatility would be 21 or 30 days. Historic volatility is a specific, calculable number based on historic prices. This is contrast to implied volatility which is a prediction of future prices.

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