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Stock prices rise and fall. The measure of the speed and extent of stock prices changes is known as volatility. The traders use volatility for a number of purposes, such as figuring out the price to pay for an option contract on a stock. You are required to figure out a stock's standard deviation, which is a measure of how widely stock prices are spread around their average value if you want to calculate volatility. Calculations can be done on a spreadsheet or with a calculator.