According to BlockBeats, the BitVol index, launched by financial index company T3 Index in collaboration with options trading platform LedgerX, saw a minor increase to 51.6 on June 16, marking a daily increase of 1.14%.
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, by substituting the actual price of the option and all other parameters except volatility (σ) into the formula.
The actual price of an option is formed through competition among many options traders. Therefore, implied volatility represents the market participants' views and expectations about the future of the market, and is considered to be the closest to the real volatility at that time.
