How is the implied volatility calculated
How is the implied volatility calculated?
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Start along with the prices of traded vanilla options, generally the mid price among bid and offer, as well as all other parameters required in the Black–Scholes formula, as strikes, interest rates, expirations, dividends and except for volatilities.
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What is implied volatility? Answer: Implied volatility is number into the Black–Scholes formula which makes a theoretical price equal a market price.
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