Stochastic volatility jump
Okay kiddo, stochastic means that something is random, and volatility is a fancy word for how much a price of something, like a share of a company, changes over time. When we say "jump" in this context, we mean that the price of something suddenly and unexpectedly goes up or down a lot.
So when we talk about stochastic volatility jumping, we are talking about a situation where the random changes to the price of something suddenly get even more crazy and unpredictable for a little bit. This could happen because of unexpected news about the company, a change in the overall economic environment, or even just some big investors deciding to buy or sell a lot of shares all at once.
These jumps can be really exciting for people who trade stocks, but they can also be scary because it's hard to predict what's going to happen next. It's like trying to guess where a ball is going to bounce when it hits the ground - sometimes it goes a different way than you expect!
So when we talk about stochastic volatility jumping, we are talking about a situation where the random changes to the price of something suddenly get even more crazy and unpredictable for a little bit. This could happen because of unexpected news about the company, a change in the overall economic environment, or even just some big investors deciding to buy or sell a lot of shares all at once.
These jumps can be really exciting for people who trade stocks, but they can also be scary because it's hard to predict what's going to happen next. It's like trying to guess where a ball is going to bounce when it hits the ground - sometimes it goes a different way than you expect!