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Trading and risk

Implied volatility

IV

How much movement the market expects in the underlying, worked back from option premiums. When it falls, for example once an awaited event has passed, premiums can fall even if the price moves your way.

Published by Investology Quant Data Services Private Limited (Investology), a SEBI-registered Research Analyst (INH000029528).
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Options basics: premium, strike, expiry and time decay explains this term in more detail.

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