Fluctuations in a company's stock price or in prices throughout a stock market. Volatility is one of the key variables in stock option valuation models, such as
Black-Scholes. Companies use these models to calculate the related corporate
earnings charge. The
FASB allows companies flexibility in measuring the volatility of their stock prices. Companies can use estimators involving historical volatility, peer historical volatility, implied volatility, or a blend of these.