Frequently Asked Questions

Implied volatility (IV) is a measure of the expected future volatility of an underlying asset, such as Bitcoin or Ethereum. It is derived from the prices of options contracts and reflects the market's expectations of how much the asset's price will fluctuate over a certain period of time. IV is often referred to as the "fear gauge" because it is believed to indicate investors' sentiment and uncertainty about the future price movements of the asset. It is an important concept in options trading and can be calculated using different methodologies, such as model-dependent or model-free approaches. The Volmex Implied Volatility Indices use a model-free approach to calculate the IV of crypto assets and provide forward-looking market views expressed as an index. Details of the methodology can be found here.