Search

Nearby Terms

implement
implied volatility
import

implied volatility

definition

The theoretical expected annualized standard deviation of future price changes in an underlying asset. Professional option dealers often trade forex options based on implied volatility, which can also be computed by entering an option's market price and other relevant observables and parameters into an option pricing model and mathematically solving for its value.

Related Terms

 • volatility smile  • vega  • implication