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  "id": "implied-volatility-options",
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  "collection": "defi",
  "title": "Implied volatility: what an option price says, and what it does not",
  "description": "Read implied volatility as a model-based interpretation of price, not a prediction of direction or a guaranteed future move.",
  "aliases": [
    "crypto options implied volatility meaning",
    "implied volatility versus historical volatility"
  ],
  "dates": {
    "published": "2026-10-02",
    "modified": "2026-10-02",
    "verified": "2026-10-02T19:18:00.092Z",
    "dataAsOf": "2026-10-02"
  },
  "authorship": {
    "publisher": "Degrees of Satoshi editorial project",
    "process": "AI-assisted research and drafting with a separate automated source-verification pass; no external expert or named human review is implied."
  },
  "quickAnswer": {
    "text": "Implied volatility is the volatility input consistent with an option’s observed price under a chosen pricing model and other inputs. It differs from historical volatility measured from past returns. Higher implied volatility generally raises otherwise comparable call and put values; it does not specify whether the underlying will rise or fall.",
    "claimId": "implied-volatility-options-quick-answer",
    "sourceIds": [
      "x425-defi-oic-volatility",
      "x425-defi-oic-pricing",
      "x425-defi-deribit-inverse"
    ]
  },
  "keyFacts": [
    {
      "label": "Historical",
      "value": "Historical volatility is calculated from observed past price changes.",
      "sourceIds": [
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      ],
      "id": "historical",
      "claimId": "implied-volatility-options-fact-historical"
    },
    {
      "label": "Implied",
      "value": "Implied volatility is inferred from option pricing.",
      "sourceIds": [
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      ],
      "id": "implied",
      "claimId": "implied-volatility-options-fact-implied"
    },
    {
      "label": "Vega",
      "value": "Vega describes modeled sensitivity to an implied-volatility change.",
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        "x425-defi-oic-volatility"
      ],
      "id": "vega",
      "claimId": "implied-volatility-options-fact-vega"
    }
  ],
  "prerequisites": [
    "option-premium-intrinsic-time-value"
  ],
  "sections": [
    {
      "id": "compare",
      "heading": "Hold the other inputs steady",
      "sourceIds": [
        "x425-defi-oic-pricing",
        "x425-defi-oic-volatility"
      ],
      "paragraphs": [
        "Imagine the same option evaluated at the same underlying price, strike and remaining time, but with a higher market premium. A pricing model can translate that change into a higher implied volatility. It does not follow that the seller now expects a specific upward move.",
        "Comparing different strikes or expiries introduces other differences, so a single percentage needs its contract context."
      ]
    },
    {
      "id": "sensitivity",
      "heading": "Treat Greeks as local estimates",
      "sourceIds": [
        "x425-defi-oic-volatility"
      ],
      "paragraphs": [
        "For an invented vega of 0.20 quote units per one percentage-point change in IV, a three-point increase estimates a 0.60 rise in option value if other inputs stay fixed. Actual changes can differ because sensitivities and market prices move together. The estimate is not a guaranteed tradable gain."
      ]
    },
    {
      "id": "implementation",
      "heading": "The displayed model matters",
      "sourceIds": [
        "x425-defi-deribit-inverse"
      ],
      "paragraphs": [
        "Deribit’s inverse-option documentation says its displayed IV uses the forward rather than the spot index as the underlying input. Two platforms can therefore show different IVs if their prices or modeling assumptions differ. A high IV alone does not establish that an option is overpriced; that conclusion requires a view about future outcomes and costs."
      ]
    }
  ],
  "faq": [
    {
      "question": "Does 80% IV mean an 80% chance the asset rises?",
      "answer": "No. IV is a modeled measure of price variability, not that directional probability.",
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        "notes": [
          "Checked OIC historical/implied volatility and vega, Deribit forward input.0.20×3=0.60 local estimate;IV not directional probability."
        ]
      }
    },
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        "notes": [
          "Checked OIC historical/implied volatility and vega, Deribit forward input.0.20×3=0.60 local estimate;IV not directional probability."
        ]
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        "notes": [
          "Checked OIC historical/implied volatility and vega, Deribit forward input.0.20×3=0.60 local estimate;IV not directional probability."
        ]
      }
    },
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        "notes": [
          "Checked OIC historical/implied volatility and vega, Deribit forward input.0.20×3=0.60 local estimate;IV not directional probability."
        ]
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    }
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      "url": "https://www.optionseducation.org/advancedconcepts/volatility-the-greeks",
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      "note": "Model-implied volatility and its interpretation.",
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      "id": "x425-defi-oic-pricing",
      "label": "Options Pricing",
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      "url": "https://www.optionseducation.org/optionsoverview/options-pricing",
      "locator": "Intrinsic value; Time value; Premium inputs",
      "note": "Option price components and model inputs.",
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  "related": {
    "articles": [
      "crypto-call-put-options",
      "options-settlement-currency",
      "mark-index-last-price",
      "option-premium-intrinsic-time-value"
    ],
    "dossiers": [],
    "wallets": []
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    }
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  "citation": "Degrees of Satoshi editorial project. “Implied volatility: what an option price says, and what it does not.” Published 2026-10-02; updated 2026-10-02. https://degreesofsatoshi.com/encyclopedia/implied-volatility-options/"
}