Implied Volatility

warning: call_user_func_array() expects parameter 1 to be a valid callback, function '_book_outline_access' not found or invalid function name in /export/home/users/ibkb/drupal/drupal-6.16/includes/menu.inc on line 452.

The volatility implied in the price of an option.  Implied volatility is a measure of how much the market thinks prices will move given a known option price.  It indicates the size, but not the direction, of the movement expected.  Volatility is expressed as an annualized percentage.