Compression Ratio
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Compression ratio is the ratio between the total cylinder volume when the piston is at the bottom of its stroke and the volume when it's at the top (combustion chamber volume). Higher compression ratios generally improve thermal efficiency and power output, but also increase the risk of knock (pre-ignition) with lower-octane fuel.

Compression ratio = (swept volume + combustion chamber volume) ÷ combustion chamber volume. Swept volume is the volume displaced by the piston moving from bottom dead center to top dead center; combustion chamber volume is what remains above the piston at top dead center.

Higher-octane fuel resists premature, uncontrolled ignition (knock) better than lower-octane fuel under the higher pressures and temperatures that come with higher compression. This is why high-compression performance engines typically require premium fuel, while lower-compression engines can run safely on regular fuel.

People sometimes think a turbocharged or supercharged engine's static compression ratio tells the whole story, but forced induction adds additional pressure on top of the mechanical compression ratio, producing an effective (dynamic) compression ratio that's higher than the static number suggests — which is why turbocharged engines usually run lower static compression ratios than naturally aspirated ones.

Generally higher compression improves thermal efficiency, which can improve fuel economy, but only up to the point where knock becomes a risk without adjusting ignition timing or fuel octane. Beyond that point, engine control systems may retard timing to prevent knock, which can actually reduce both power and efficiency.