Historical Volatility

Concept

HV calculates the standard deviation of log returns over N periods, then annualizes (×√252 for stocks, ×√365 for crypto).

• Expressed as percentage (e.g., 25% HV)
• Higher HV = more volatile asset
• Key input for options pricing models

Uses

• Compare asset volatility levels
• Options trading decisions
• Position sizing adjustments
• Compare current HV vs average for regime