The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we're going to answer the question, “What’s the difference between volume and volatility?” This is another member question. Somebody sent me a question and basically, it was this. It was, “Some places are saying that if a stock has high volume, then it might also have high volatility or I see that people are mentioning that a stock is moving really high in volume and volatility, but can it really be both? What's the difference between volume and volatility?” The simple answer to this is that volume tells you how much of something is being traded. Volume in the sense of either stocks or options tells you how much of that stock or option contract is being traded. If there's a lot of volume, that means that there's a lot of trading that's occurring, there's a spike in trading activity. Now, this doesn't always mean anything for direction. A high spike in volume for call options could be a hedge and doesn't necessar