The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again from Option Alpha and welcome back to the daily call. Today, we’re going to be answering the question, “What is historical volatility?” Historical volatility is simply the volatility that has happened historically in the past for a particular security at any given time or during any given time period. Now, most people actually honestly still confuse this with implied volatility. But implied volatility is forward-looking. Implied volatility looks at the possible or projected or expected volatility that a stock might exhibit moving forward into the future. Historical volatility is easy to figure out. We know historically that Apple might have been volatile with a 20% up or down move in any given time period. That’s something that we can look at retroactively or retrospectively and figure out what the historical volatility is of Apple. Now, the reality is that historical volatility has sometimes very little to do with what their projection of future implied volatility could