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Could you explain that why the implied volatility maybe much higher or lower than the average true volatility of the last week? For example, option
Could you explain that why the implied volatility maybe much higher or lower than the average true volatility of the last week?
For example, option prices give an implied volatility of 15 but the underlying has been moving with a volatility of 10 for the last week.
Better to refer Butterfly spread or others if needed.
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