Market mechanics · Rookie
Volatility
What does Volatility mean?
Volatility measures the variability of price changes over a specified period. It describes movement, not whether the next move will be upward or downward.
Example
Two markets at the same price can have very different typical daily ranges.
Illustrative example; not a provider’s quoted offer.Why it matters for prop traders
A stop distance or position size suited to one volatility environment may behave differently in another.
Sources and further reading
The following primary sources support the terminology. Provider rules describe their own products and may change.