Volatility
Risk
Volatility is the magnitude of price movement over time, often measured by standard deviation or ATR.
Volatility is the magnitude of price movement over time, commonly measured by standard deviation, ATR, or implied volatility (for options). In prop trading, volatility affects sizing, margin, and the appropriate stop-loss distance.
Volatility shifts can also trigger firm-side risk adjustments — many firms tighten leverage during high-volatility periods or restrict trading on instruments where the firm''s slippage modeling becomes unreliable.
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