Historical Volatility
a.k.a. Realised volatility, HV
How much a price has actually moved around in the past, measured statistically.
In plain English
How much a price has actually moved around in the past, measured statistically.
Historical volatility measures past price swings, usually as the annualised standard deviation of returns over a period like 20 or 30 days.
It looks backward. Implied volatility looks forward, from option prices. Comparing the two shows whether options are cheap or dear relative to recent behaviour.
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