Knowledge Base/What is Implied Volatility (IV)?
What is Implied Volatility (IV)?
Implied Volatility (IV) is a metric used to estimate the likelihood of changes in a security’s price.
It can be used to project future price moves and is used to price options contracts. IV helps quantify market sentiment and uncertainty, but it is based on price alone and not fundamentals. We use the binomial option pricing model to calculate our IV. You can learn more about Implied Volatility in our resource “Greeks and Implied Volatility”
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