The Difference Between Implied and Historical Volatilities

In contrast to historical volatility (HV), which looks at actual asset prices in the past, implied volatility (IV) looks ahead. … Implied volatility can be derived from the price of an option. Specifically, implied volatility is the expected future volatility of the stock that is implied by the price of the stock’s options

Click the video above to see how we dive into this important aspect of options trading.