What is Implied volatility & the vol surface?

Implied volatility (IV) is the market's forecast of future price movement priced into options. The volatility surface maps IV across strikes and expiries, exposing skew (fear vs greed) and term structure.

How to read it

Rising IV before an event means the market expects a big move. Put skew above call skew signals demand for downside protection (fear).

FAQ

What is volatility skew?

The difference in IV between out-of-the-money puts and calls — it shows which tail the market is paying up to hedge.

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