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What Is Implied Volatility (IV)?

By Adam Levy – Updated Aug 8, 2025 at 8:56PM

Key Points

  • IV helps gauge market's price change expectation for assets, derived from options pricing.
  • Using IV, investors predict price ranges with up to 98% confidence depending on the scenario.
  • IV spikes with impactful news, offering trading opportunities; typically, it reverts to mean.

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