BlockBeats news, on December 25, the BitVol (Bitcoin Volatility) index launched by financial index company T3 Index in collaboration with options trading platform LedgerX rose to 65.36 yesterday, with a daily increase of 3.3%.
BlockBeats Note: The BitVol Index measures the 30-day expected implied volatility derived from the prices of tradable Bitcoin options. Implied volatility refers to the volatility implied by the actual option prices. It is the volatility that is inferred by using the B-S option pricing formula, where the actual option price and other parameters excluding volatility σ are substituted into the formula.
The actual price of options is formed by the competition among numerous options traders; therefore, implied volatility represents the market participants' views and expectations about the future of the market, and is thus seen as the closest approximation to the true volatility at that time.