What Is an Option's 'Implied Volatility

question 131

Essay

What is an option's 'implied volatility'?

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Definitions:

Color

A visual property of objects caused by the way they reflect or emit light, perceived by the eyes and interpreted by the brain.

Enlightenment

A cultural and intellectual movement in Europe during the 17th and 18th centuries emphasizing reason, individualism, and skepticism towards traditional ideas.

Greco-Roman World

A term referring to the regions and cultures that were directly influenced by the language, culture, government, and religion of the ancient Greeks and Romans.

Cornelia Presenting Her Children

A historical reference to Cornelia, mother of the Gracchi brothers, who when asked about her jewels, presented her sons as her most precious treasures.