IV and Implied Volatility
Two terms that confuse beginners and yet hold massive importance are VIX and Implied Volatility which assist a trader in interpreting the price pattern and fundamentals of any security. MHV Education offers Best Stock Market Course in Dehradun which helps you in mastering these concepts. VIX in detail : The VIX is known as the Volatility Index or the Fear Gauge which measures the market's expectations of volatility over the next 30 days. It is derived from options prices on the Nifty (in India) or S&P 500 (in the US). High VIX shows high volatility and High Fear Low VIX shows Stable volatility A rise in VIX signals panic in the market and is often followed by Bearish market. ⚙️ What is Implied Volatility (IV)? Implied Volatility is the market’s forecast of a likely movement in a stock or index. It tells a trader how much the market expects the asset to move not necessarily which direction. High IV: Expensive options, bigger expected moves Low IV: Cheaper options, smaller expe...