Is volatility constant

Is volatility constant?




Volatility does not come into view to be constant. By that we mean that actual volatility is certainly not constant, actual volatility being the amount of randomness within a stock’s return. But actual volatility is something you can attempt to measure from a stock price time series, and would exist even though options didn’t exist. Though, it is easy to say along with confidence as actual volatility is not constant, this is altogether much harder to calculate the future behaviour of volatility. Therefore might explain why implied volatility is not constant, and people believe as volatility is not constant.

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