![](https://www.prospertrading.com/wp-content/uploads/2019/03/Implied-Volatility-961x641.jpg)
In simple terms, IV is determined by the current price of option contracts on a particular stock or future. It is represented as a percentage that indicates the annualized expected one standard deviation range for the stock based on the option prices. For example, an IV of 25% on a $200 stock would represent a one standard deviation range of $50 over the next year.
Click the video below to learn more about implied volatility.
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