Volatility is a statistical measure of the dispersion of returns on a particular stock or stock index. In most cases, the higher the volatility, the riskier the security. Volatility can be measured using the standard deviation or variance between the returns of the same stock or stock index.
Higher volatility means that the value of a stock can potentially be spread over a wider range of values. This means that the price of the stock can change dramatically over a short period of time in either direction.
Lower volatility means that the value of a security does not fluctuate dramatically and tends to be more stable. For example, the volatility of Bitcoin is very high, while the volatility of Microsoft stock is much lower and predictable over the short term.
