How Does 'Historical Volatility' Differ from Implied Volatility? ⎊ Path

How Does ‘Historical Volatility’ Differ from Implied Volatility?

Historical Volatility (HV) is a backward-looking measure, calculated from the standard deviation of past price movements of the underlying asset over a specific period. Implied Volatility (IV) is a forward-looking measure, derived from the current market price of the option, representing the market's expectation of future volatility.

HV is factual; IV is speculative.

What Is the Difference between Historical and Implied Volatility?

Explain the Difference between Implied Volatility and Historical Volatility

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

How Is ‘Historical Volatility’ Different from ‘Implied Volatility’ in the Context of Options Trading?

How Does the Concept of ‘Implied Volatility’ Differ from ‘Historical Volatility’ in Options?

How Does the Term “Speculative” Relate to the Expectation of Profit?

How Does “Historical Volatility” Differ from Implied Volatility?

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Glossar

Implied Volatility

Expectation ⎊ This value represents the market's consensus forecast of future asset price fluctuation, derived by reversing option pricing models using current market premiums.