The volatility refers to the standard deviation of the change in value of a financial instrument. It is often used to quantify the risk of the instrument over a time period. Volatility is typically expressed in annualized terms, as a fraction of the initial value.

More broadly, volatility refers to the degree of unpredictable change over time of a certain variable. It may be measured via the standard deviation of a sample, as mentioned above. However, price changes actually do not follow Gaussian distributions. Better distributions used to describe them actually have "fat tails" although their variance remains finite. Therefore, other metrics may be used to describe the degree of spread of the variable.