How Does “Historical Volatility” Differ from Implied Volatility?

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

HV describes what has happened; IV describes what the market expects to happen.