According to BlockBeats, the BitVol (Bitcoin Volatility) Index, launched by financial index company T3 Index in collaboration with options trading platform LedgerX, fell to 55.59 on August 27, marking a single-day decrease of 4.12%.
The BitVol Index measures the 30-day expected implied volatility derived from tradable Bitcoin options prices. Implied volatility refers to the volatility implied by the actual option prices. It is calculated using the Black-Scholes option pricing formula, where the actual option price and other parameters, excluding volatility (σ), are input into the formula to derive the implied volatility.
The actual price of options is formed through competition among numerous options traders. Therefore, implied volatility represents market participants' views and expectations for the future of the market, making it the closest representation of the true volatility at that time.
