Volatility refers to the degree of variation in a financial market or asset's price over time. It indicates how much the price of an asset fluctuates, with higher volatility suggesting greater unpredictability and risk. This term is commonly used in finance and economics to describe the potential for rapid and significant changes in value.
The word "volatility" is derived from the Latin word "volatilis," which means "flying" or "able to fly." It entered the English language in the late 15th century, initially relating to something that is changeable or unstable.