![Implied Volatility](https://img-cdn.financeunlocked.com/headers-images/euromoney/4.jpg?ik-sdk-version=javascript-1.0.3)
Glossary
Technical Foundations
Implied Volatility
Volatility in options markets statistically measures the standard deviation of potential annualised returns of a security or asset. Options markets use historic and implied volatility. Historic volatility tells traders how volatile a security has been in the past, whereas implied volatility is the degree of annualised forward-looking volatility implied by the option’s current price. The higher the implied volatility, the higher the options price.