Implied Volatility vs Historical: Why the Smile Exists
Historical volatility measures the past; implied volatility prices the future, and the two are routinely confused. This post covers how each is…
Historical volatility measures the past; implied volatility prices the future, and the two are routinely confused. This post covers how each is…
The Black-Scholes formula has five inputs and a set of assumptions, and knowing what each does is worth more than reproducing the…
An option's payoff bends where a forward's runs straight, and that kink is the source of everything difficult about pricing them. This…