X-Nico

2 unusual facts about implied volatility


Implied volatility

When forced to solve for vega numerically, it usually turns out that Brent's method is more efficient as a root-finding technique.

While there are many techniques for finding roots, two of the most commonly used are Newton's method and Brent's method.


Equity premium puzzle

They found a modest correlation of 0.62 between the 10-year equity premium and a measure of implied volatility (in this case VIX, the Chicago Board Options Exchange Volatility Index).


see also

Fear index

Fear Index - common name for the Chicago Board Options Exchange Market Volatility Index, ticker symbol VIX, measuring the implied volatility of S&P 500 index options