Volatility is a measure of how much the price of an asset fluctuates. It is often measured by the standard deviation of the asset’s price over a period of time. Volatility can be used to gauge the risk of an investment. Assets with high volatility are considered to be more risky than assets with low volatility.
There are a number of ways to buy volatility. One way is to buy options on an asset. Options give the buyer the right, but not the obligation, to buy or sell an asset at a specified price on or before a specified date. Options can be used to speculate on the volatility of an asset. If the volatility of the asset increases, the value of the option will also increase.
