What Is Implied Volatility in the Context of Crypto Options Trading?

Implied volatility (IV) is a forward-looking measure derived from the market price of an options contract. It represents the market's expectation of how much the underlying asset's price will fluctuate over the option's life.

High IV means the market expects large price swings, making options more expensive. It is a key input into options pricing models and a crucial indicator of market sentiment.