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How Is Historical Volatility Typically Annualized for Comparison with Implied Volatility?

Historical Volatility (HV) is typically calculated using daily price returns and then annualized by multiplying the daily volatility by the square root of the number of trading days in a year (e.g. square root of 365 for crypto, or 252 for traditional markets). This standardizes the measure for comparison with annualized IV.

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