Implied Volatility: An Overview

Implied volatility (IV) plays a crucial role in options pricing—and understanding how it works can give traders a better grasp of market expectations and valuation differences.

In this video, we explore:
What implied volatility is and how it differs from historical volatility
Why IV is considered subjective and how it affects fair value pricing
An example showing how changes in IV can impact option value

Contact our Investor Education team for help with your options questions and continued education at [email protected].

Visit http://www.OptionsEducation.org for options resources, courses, podcasts, videos, webinars and more taught by options professionals.

For daily options insight and more great content, follow us on our social media channels:
Twitter: @Options_Edu
LinkedIn: / the-options-industry-council-oic-
Facebook: / optionsindustrycouncil

All OIC material is provided for educational purposes only. Completing or viewing any OIC content does not guarantee that an individual has obtained a minimum level of knowledge or skill, is not an indication of investor suitability to trade options, and should not be used to determine an individual’s trading or investing competency or sophistication. Any strategies discussed, including examples using actual securities and price data, are strictly for illustrative and educational purposes. Past performance is not a guarantee of future results.