How Does Implied Volatility in Options Differ from Historical Volatility in Cryptocurrency Prices? ▴ Learn

How Does Implied Volatility in Options Differ from Historical Volatility in Cryptocurrency Prices?

Historical volatility measures the actual price fluctuations of a cryptocurrency over a past period. Implied volatility (IV) is a forward-looking measure derived from the market price of an option contract.

IV represents the market's expectation of how volatile the asset's price will be in the future. Miners often look at historical volatility for risk assessment but use IV to gauge the cost and value of hedging strategies.

What Is the Difference between Historical and Implied Volatility?

Define Implied Volatility (IV) and Contrast It with Historical Volatility (HV)

What Is the Difference between Implied Volatility and Historical Volatility?

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