Implied Volatility vs. Historical Volatility
![Implied Volatility vs. Historical Volatility](/content/images/size/w1200/2024/01/Video-Cover--12-.png)
Implied Volatility (IV): This is a market-derived estimate of future volatility embedded in the current prices of options. It reflects the market's expectations for future price fluctuations of the underlying asset.
Historical Volatility (HV): This is a measure of past price fluctuations. It calculates the volatility based on historical price data over a specific period.