I remember when I just started learning all about financial markets, forex, stocks, technical as well as fundamental analysis, it all seemed so difficult, yet at the same time very interesting. Before I get ahead of myself - I still do think so and in reality, I still don't know a thing about it. And I haven't really traded anything for a long time now.
But I do remember that when I started, I noticed that volatility in the market can make your trading risky, but the risk and return ratio in these cases are often worth it. At least that was my personal non-professional opinion. But using volatility can also be used to your advantage when talking about reducing risks. One way is to Turn Volatility to Your Advantage with CBOE VIX Options and Futures
But before we go on, let's remind ourselves, what volatility actually is. Volatility is basically a "'statistical measure of the dispersion of returns for a given security or market index." (source:investopedia) It refers to the "amount of risk about the size of changes in a security's value." In usual cases, the higher the volatility, the higher the risk.
Let's try to put it all into a bit easier words - volatility shows the fluctuation of the security's price. How big changes there are daily, is the stock's price stable or does it change a lot over a period of time (be it hours, days, months, years).
If you want to capitalize on volatility, diversify your portfolio and manage risk at the same time, check out VIX options
and futures offered at CBOE and CBOE Futures Exchange. Learn more about them below.