Volatility risk premium

Volatility Risk Premium is like a bonus you get for taking on a risky investment. It's sort of like when you go to a carnival, where you can play a game and win a prize. In the financial world, when you invest in something that is very risky, like a stock that has a lot of ups and downs in its price, you can end up making more money than you would in a safer investment. The extra money you make is like the prize in the carnival game, and it is called the Volatility Risk Premium.