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Implied Volatility
Implied volatility is the level of volatility implied by current option prices when those prices are interpreted through an option pricing model. It reflects the market's pricing of future uncertainty over the relevant period rather than a direct prediction of direction.
Why it matters to you
Higher implied volatility generally increases option premiums, all else equal, because larger future price movements become more plausible in the pricing framework. Lower implied volatility generally reduces that volatility component of option value. This is why: Bullish does not automatically mean calls are cheap. A trader may be bullish while the options are already pricing very high uncertainty.