Market volatility refers to the degree of variation in trading prices of financial assets over time. It is often quantified by the standard deviation of returns, indicating how much the price of an asset fluctuates. High volatility means that asset prices can change dramatically in a short period, leading to increased risk for investors. Conversely, low volatility indicates more stable price movements, reflecting a quieter market environment. Market volatility can be driven by various factors, including economic indicators, political events, changes in supply and demand, and investor sentiment. Understanding volatility is crucial for traders and investors, as it affects their risk management strategies and investment decisions.