A higher volatility means that a security's value can potentially be spread out over a larger range of values. This means that the price of the security can change dramatically over a short time period in either direction. A lower volatility means that a security's value does not fluctuate dramatically, and tends to be more steady.

When volatility is high, it can be a signal that the market is uncertain or that there is significant disagreement among market participants about the future direction of the underlying asset. This uncertainty can lead to both increased buying and selling pressure, which can result in significant price movements.

When volatility rises, it can signal a change in market sentiment or a shift in economic conditions. For example, a sudden increase in volatility in a currency pair may indicate that there is significant uncertainty about the direction of interest rates or geopolitical events.

As volatility increases, the prices of all options on that underlying—both calls and puts and at all strike prices—tend to rise. This is because the chances of all options finishing in the money likewise increase. As volatility increases the deltas of all options - both calls and puts and at all strike prices - approach 0.50.