implied volatility

implied volatility

/ɪmˈplaɪd ˌvɒləˈtɪlɪti/

⚙️ Options & Derivatives

the market's forecast of likely future price movement, derived from current option prices

Implied volatility spiked before the earnings announcement, making options expensive.

Origin: Latin implicare to involve + volatilis flying — volatility implied by market prices