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Volatility measures how much an investment's price goes up and down over time. High volatility means bigger, more frequent price swings.
In Depth
Volatility is a statistical measure of the dispersion of returns for a given security or market index. It indicates the degree of variation of a trading price series over time. High volatility often means higher risk, as the value of an investment can change dramatically in a short period. However, it can also present opportunities for higher returns if timed correctly. Investors often consider volatility when making decisions about risk tolerance and portfolio diversification.
Example
A stock that frequently sees its price jump or drop by 10% or more in a single day is considered highly volatile.