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What is 'Volatility'?

Volatility is a way of calculating the element of risk attached to a casino table game or video slot. Although most gamblers will look at the casino's advantage (house edge) when it comes to deciding whether or not to play a particular game, some will also look at the volatility. The volatility of a game can be worked out by looking at a player's result at the end of the game, along with the house edge. If, after the calculations have been made, the difference is small, the game can be said to have a low volatility level. If, on the other hand, the game offers a large difference, (the player could either end up with a big jackpot or nothing at all) then the game will be classed as having high volatility. Experienced gamblers know that just because a game has high volatility, it doesn't necessarily mean it should be avoided but players should be aware of it so they can adapt their strategy appropriately.

'Volatility' Explained

The concept of volatility has a couple of sides to it, one of which is entirely down to the player. As much as a casino may wish to, they cannot control the size of a player's bets. How much or how little a player decides to wager is entirely down to them. By simply having that choice, a player is in control of one of the key aspects of volatility. This control is sometimes referred to in volatility terms as 'money management'.The other side of volatility refers to the difference in results over an extended period of time. Over the course of a day, any given game will have a natural swing to its results. Sometimes the results will seemingly go against the player if they hit an 'unlucky streak', and sometimes it will go their way for a while. The point within the game where a player finds out whether or not they have won a payout or lost their bet is what controls the second side of volatility.Taking a coin toss as an example, if a player is getting paid out at a ratio of 1:1 for every time they correctly guess heads or tails, then this is a low volatility game. This is because the player has a 50% chance of choosing correctly and when you add that to the fact that both the potential wins and losses are small, it makes a very low volatility game. If this is compared to a casino game such as roulette, where players can place a wager on a single number, then by contrast roulette has high volatility because it offers certain bets where the wins on offer are high, but so are the losses.