Explain the Difference between ‘Historical Volatility’ and ‘Implied Volatility’ in Margin Models

Historical volatility is a backward-looking measure, calculated from the past price movements of the underlying asset, and is often used as a direct input for margin calculation models. Implied volatility is a forward-looking measure, derived from the current market price of the option, representing the market's expectation of future price swings.

Margin models often use a combination, but implied volatility is more dynamic and can lead to more immediate margin adjustments.