Volatility, or instability, refers to the degree of variation in the price of a financial asset over time. High volatility indicates that the asset's price can change dramatically in a short period, making it riskier for investors. This can be influenced by various factors, including market sentiment, economic indicators, and geopolitical events. In financial markets, volatility is often measured using statistical tools like standard deviation or the VIX index, which reflects market expectations of future volatility. Understanding volatility helps investors make informed decisions about risk management and investment strategies, especially in uncertain economic conditions.