MONEY GLOBE XOptions Basics · Lesson 4
Implied volatility
The price of fear
Members
In this lesson
Understand implied volatility, calculate the market's expected move, and know why options get cheaper after big events.
Key takeaways
- Implied volatility (IV) is the market's expectation of future movement, priced into options.
- Higher IV makes options more expensive; lower IV makes them cheaper.
- One-standard-deviation expected move ≈ price × IV × √(days ÷ 365) — roughly two-thirds of outcomes fall inside it.
- IV crush: after a big event, IV often drops sharply and options lose value.
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Educational information only - not financial advice.