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Volatility Premium
Volatility premium is a broad term used to describe the additional value associated with volatility expectations or the difference between volatility priced by options and another volatility reference.
Why it matters to you
The phrase is used in several ways, so traders need to understand the context in which it appears. For GnosisFi, the more precise concept Volatility Risk Premium should generally be preferred when discussing the systematic relationship between implied and realized volatility.