Implied volatility (IV)
The volatility the options market is pricing in, backed out of an option's price and annualized.
How to read it
High IV means options are expensive: the market expects large moves. Compare it with realized volatility to see whether that expectation is running above what has actually happened.
How to use it
Compare it with realized volatility and with its own history to judge whether options are cheap or expensive.
Limitations
A price, not a forecast; it usually rises into known events such as earnings.
In Kereon
Options. Each contract's IV is the data vendor's. At-the-money IV interpolates between the two listed strikes either side of the price, taking the out-of-the-money side of each. Median IV is the middle IV of every quoted contract at the expiry.
Investing · company. At-the-money IV of the nearest usable expiry, from the same chain the Options section loads.
Also called: implied volatility, iv, median iv, atm iv, implied less realized.