Monday, March 19, 2018
Volatility Surface: Explaining Volatility Surface
Have you ever heard the term volatility surface? If you have, you either know exactly what it means or you are beyond lost. It’s not uncommon for people to hear this term and get confused. They hear volatility and think problem. They hear surface and think that the problem is only at the “tip of the iceberg,” so to say. The volatility surface is basically the implied volatility that can be seen due to discrepancies prices of market stock options and what the stock option models say the prices should actually be right now.