Implied-price-volatility Definition

An estimate of the expected volatility of the security that an option is based upon, determined by the price, or premium, of the option. Factors affecting implied volatility are the exercise price of the options, the risk-free rate of return, the option’s maturity date, and the price of the option. Pricing models, such as the Black-Scholes option pricing model, can be used to solve for implied price volatility.
Webster's New World Finance

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