Implied Volatility
What is implied volatility and how does it different from historical volatility? Most people get these two mixed up. Implied volatility is based on the options in a given chain. The Implied volatility is derived from the mid price of the actual bid and ask price for a specific option. You should know the implied volatility number better than you know the stock price. Using implied volatility will help you define how much risk is in given trading products.