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Market Intelligence › Basic Terminologies
The market's expectation of how much volatility will arise in the future is derived from the option price.
Published by The Retail Trader · JUL 31, 2026 · Derivatives (F&O)
Implied Volatility (IV) — The market's expectation of future volatility, calculated from the option price. High IV means expensive premium.
This term comes under Derivatives (F&O), in the section "GREEKS and VOLATILITY". The Greeks explain what causes the price of an option to move and by how much - without knowing this, go on in option trading and here:
Other terms in this group — understanding them together is more useful:
• Delta
• Gamma
• Theta
• Vega
• Rho
• IV Crush
• Historical Volatility
• India VIX
• Time Decay Curve
To read the entire group and all its examples in one place, see the journal "DERIVATIVES: DICTIONARY OF FUTURES & OPTIONS" - this term has been taken from there.
This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.