According to BlockBeats, the BitVol index, a measure of Bitcoin volatility, has seen a minor increase to 50.47, a daily increase of 0.72%. The index was launched by financial index company T3 Index in collaboration with options trading platform LedgerX.
The BitVol index measures the expected implied volatility derived from tradable Bitcoin options prices. Implied volatility refers to the volatility implied by the actual price of an option. It is calculated using the B-S option pricing formula, substituting the actual option price and other parameters into the formula, excluding volatility σ.
The actual price of an option is formed by competition among many options traders. Therefore, implied volatility represents the market participants' views and expectations for the future of the market, and is considered to be the closest to the real volatility at that time.
