What Is the Term for the Difference between Implied Volatility and Historical Volatility? ▴ Learn

What Is the Term for the Difference between Implied Volatility and Historical Volatility?

The difference between implied volatility (IV) and historical volatility (HV) is often referred to as the "volatility spread" or "IV rank." IV is forward-looking, based on the option's premium, while HV is backward-looking, based on past price movements. Traders analyze this spread to determine if options are currently overpriced (IV > HV) or underpriced (IV < HV) relative to the underlying crypto's past movement.

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