According to BlockBeats, the BitVol (Bitcoin Volatility) Index, launched by financial index company T3 Index in collaboration with options trading platform LedgerX, rose to 57.18 on October 3, marking a daily increase of 0.94%.
The BitVol Index measures the 30-day expected implied volatility derived from the prices of tradable Bitcoin options. Implied volatility refers to the volatility implied by the actual option prices. It is calculated using the Black-Scholes option pricing formula, where the actual option price and other parameters, except for volatility (σ), are input into the formula to derive the implied volatility.
The actual price of options is determined by the competition among numerous options traders. Therefore, implied volatility represents the market participants' views and expectations for the future of the market, making it the closest approximation to the real-time volatility at that moment.
