Pinterest • The world’s catalogue of ideas

Historic Volatility (HV) is a statistical measurement of a stock’s price fluctuation in a one year period. Implied Volatility (IV) is what the market is “implying” the volatility of a stock will be in the future, as indicated by its options prices. In other words, implied volatility is the “market’s opinion” about the volatility of a stock and is derived by the cost of the stock’s options.