Skip to content

Implied Volatility

← Options
Volatility can be a very important factor in deciding what kind of options to buy or sell. Historical volatility reflects the range that a stock's price has fluctuated during a certain period. The mathematical value of volatility is denoted as "the annualized standard deviation of a stock's daily price changes."

There are two types of volatility: statistical volatility and implied volatility.

Statistical (Historical) Volatility is a measure of past actual asset price changes over a specific period.

Implied Volatility is a measure of how much the marketplace expects the asset price to move based on price changes in an option. It is what the market is "implying" the volatility of the stock price might be in the future.

Feedback and Knowledge Base

(thinking…)