How to Calculate Stock Price Volatility

Gather stock price information. You will need at least a month of daily stock price data. However, you will get the best results by using at least six months of data. If you don't know how to do this, go to Yahoo! Finance, input the stock's ticker symbol into 'Get Quotes,' and click on 'Historical Prices.' Copy and paste this information directly into a spreadsheet. Label Column A to represent historical stock price trading dates and Column B to show daily closing stock prices.
Find the average price over the length of time you chose. For example, if you pulled out six months of information, take the average price over 183 days. This can be set up as the AVERAGE function or by taking the sum of all daily prices (Column B) and dividing by 183.
Calculate the difference between the daily price (Column B) and the average over the range of data. If you're using a spreadsheet, create a Column C, which will refer to this difference, by subtracting Column B from the average. Copy and paste this function down the length of the data on your spreadsheet.
Square the difference. Create a Column D into which you put the square of Column C. You do this by multiplying the Column C value by itself. Now find the sum of Column D and divide by your days range (183 days for 6 months of data). This is called the variance.
Take the square root of the variance, using the SQRT function. This result gives the stock's standard deviation for the entire sample of price data. In the investor world, this number represents a measure of stock-price volatility.
Check your results with a historical-volatility calculator. Use the same data referred to in the calculations above. See Resources for a link to an historical-volatility calculator.

How to Invest in the Stock Market With Little Money

Open a discount brokerage account with a low minimum deposit requirement and low trade commissions. Some online brokers have no minimum deposit requirement to open an account and offer promotions and deals for free or cheap trade commissions.
Buy shares of a stock index fund, which is a low-fee mutual fund or exchange-traded fund that owns the same stocks as a particular stock index. An index is a group of stocks that represent a portion of the stock market. An index fund provides diversification, which spreads your money to many different investments. You can purchase index funds through your brokerage account or directly through certain fund providers.
Buy stock in a specific company using a direct stock purchase plan, or DSP. This plan is available through many large corporations, which allow you to buy stock in their company directly without using a broker. Matt Krantz says in his article 'Direct Stock Purchase is Cheap, but it Can Cost You Dearly' in 'USA Today' that the fees with a DSP are typically cheaper than buying stock through a brokerage account, but warns not to invest too much of your money in one stock.
Buy stock through a dividend reinvestment plan, or DRIP, which allows you to buy shares directly from a company and reinvest dividends in new shares. Many large companies have DRIPs that allow you to invest a small amount of money periodically and typically have low setup and maintenance fees. Many DRIPs require you to be an existing shareholder, so you may need to purchase a single share through your brokerage account before signing up for a plan.