# Implied Volatility

*Derivatives & Options — Finicade finance glossary*

Implied volatility is the volatility that makes a model's option price match the market price: the market's turbulence forecast, read out of prices.

The volatility figure that makes an option's model price match its actual market price — the market's forecast of future turbulence, read backwards out of prices. Traders quote options in implied vol rather than in dollars.

**Also known as:** implied vol, iv

**Related terms:** [Volatility](https://finicade.com/glossary/volatility), [Vega](https://finicade.com/glossary/vega), [Black–Scholes Model](https://finicade.com/glossary/black-scholes)

**Taught in:** Hull Street — Volatility & the Smile

Source: https://finicade.com/glossary/implied-volatility