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Implied Volatility




The volatility computed using the actual market prices of an option contract and one of a number of pricing models.


Additional Comments:

Example: If the market price of an option rises without a change in the price of the underlying stock or future, implied volatility will have risen.

Related Terms:

Volatility Stops
Monitoring implied volatility is critical in long neutral delta trading. Check the current volatility of the ...

Vega
The sensitivity of an option price to volatility. Typically, options increase in value during periods of ...

Back Spread
A back spread is essentially an inverted ratio spread.When constructing a back spread, you are selling ...





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