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Glossary of Option Terms: Implied Volatility
Implied Volatility
Definition: Also referred to as beta. The estimated volatility of a security’s price. Referred to as "vols", this decreases when the market is bullish and increases when it is bearish, in part due to the belief that bullish markets are a bit more risky. Implied volatility is used in calculating an option’s premium and can be derived from the Black-Scholes Model.
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