Define the Term "Realized Volatility" in Options Trading ⎊ Path

Define the Term “Realized Volatility” in Options Trading.

Realized volatility, also known as historical volatility, is a statistical measure of the actual price fluctuations of an underlying asset over a specific past period. It is calculated as the standard deviation of the asset's returns.

Traders compare realized volatility to implied volatility to determine if options are currently cheap or expensive relative to past price movements.

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Glossar

Realized Volatility

Calculation ⎊ Realized volatility, within cryptocurrency markets and derivatives, represents an empirical measure of price fluctuation over a specified period, contrasting with implied volatility derived from option pricing models.