Definition
Implied volatility is the market’s expectation of volatility. Given the value of an choice, we will clear up for the anticipated volatility of the underlying asset.
Viewing At-The-Cash (ATM) IV over time offers a normalized view of volatility expectations which is able to typically rise and fall with realized volatility and market sentiment. This metric exhibits the ATM implied volatility for choices contracts that expire one week from at present.
Realized volatility is the usual deviation of returns from the imply return of a market. Excessive values in realized volatility point out a section of excessive threat in that market rolling window of 1 week.
Fast Take
- Realized volatility has simply gone above choices volatility for the primary since FTX collapsed again in November.
- Every time this happens, Bitcoin tends to tumble down in worth
- Realized volatility exceeded 60%, whereas choices volatility is at 59%
- In the beginning of 2023, volatility was multi-year lows for Bitcoin earlier than Bitcoin surged to $21k.
The publish Realized volatility surges above choices volatility for the primary time since FTX collapse appeared first on CryptoSlate.
