What Is the Difference between Implied and Historical Volatility? ⎊ Path

What Is the Difference between Implied and Historical Volatility?

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

IV represents the market's expectation of future price volatility. If IV is higher than HV, the option is considered expensive, and vice-versa.

What Is the Difference between Historical and Implied Volatility?

How Is “Historical Volatility” Different from Implied Volatility?

Explain the Difference between ‘Implied Volatility’ and ‘Historical Volatility’

What Is Implied Volatility and How Does It Differ from Historical Volatility?

Distinguish between Historical Volatility and Implied Volatility (IV)

What Is the Difference between “Implied Volatility” and “Historical Volatility”?

How Does ‘Implied Volatility’ Differ from ‘Historical Volatility’ in Options Pricing?

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

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.