Implied volatility

The expected volatility in a stock's return derived from its option price, maturity date, exercise price, and riskless rate of return, using an option-pricing model such as Black/Scholes. The New York Times Financial Glossary

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   The volatility implied in the price of an option. It is a measure of how much the market thinks prices will move given a known option price. It indicates the size, but not the direction, of the movement expected. Volatility is expressed as an annualized percentage.
   ► See also Volatility.

Financial and business terms. 2012.

Look at other dictionaries:

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