Implied Volatility Definition
Implied Volatility is a market data metric used in Bitcoin treasury analysis.Open‑interest‑weighted implied vol for stocks.
- What is Implied Volatility?
- Open‑interest‑weighted implied vol for stocks.
- Implied Volatility Definition
- Open‑interest‑weighted implied vol for stocks.
- Implied Volatility Meaning
- Open‑interest‑weighted implied vol for stocks.
- How to calculate Implied Volatility
- Source: Yahoo Finance options. Weighted average across expiries using OI weights; normalized to annualized terms.
- Why does Implied Volatility matter?
- Forward risk expectations embedded in options.
- What does Implied Volatility mean?
- Open‑interest‑weighted implied vol for stocks.
- Implied Volatility explained
- Open‑interest‑weighted implied vol for stocks.
- Implied Volatility formula
- Source: Yahoo Finance options. Weighted average across expiries using OI weights; normalized to annualized terms.
- Implied Volatility market data
- Open‑interest‑weighted implied vol for stocks.
Implied Volatility
Open‑interest‑weighted implied vol for stocks.
What the term means
Implied Volatility (IV) is the open-interest-weighted, annualized volatility the options market expects for the stock. We compute:
Σ(Open Interesti × Implied Volatilityi) ÷ Σ(Open Interesti)
The output—typically 60–150% for treasury names—updates in real time and directly sets option prices. Unlike historical volatility, this is forward-looking.
Why the term matters for Bitcoin treasury companies
Direct driver of options yield
High IV lets treasuries monetize covered calls and cash-secured puts at 30–60% annualized yields without selling core Bitcoin. When IV sinks below ~60%, that income stream dries up, slowing BTC-per-share growth.
Gamma intensity barometer
Triple-digit IV combined with heavy Call OI means dealers sit on massive gamma exposure. Small stock moves force huge hedge adjustments, turning 5% BTC moves into 50–200% equity swings. Collapsing IV signals the gamma engine is shutting down.
Premium expansion trigger
Rising IV widens BTC Premium and mNAV multiples because investors price in larger upside and richer capital-raising windows. Falling IV compresses premiums even if BTC price is flat—it removes the justification for paying up.
Capital-raising cost signal
Convertibles, preferreds, and structured notes are priced off IV. A 120% IV environment supports 0–1% coupons and lofty conversion prices. IV under 70% forces punitive terms and slows stacking velocity.
Retail FOMO magnet
Triple-digit IV prints dominate options-flow feeds, pulling retail into weekly calls, lowering Duration Days, and supercharging momentum. IV collapsing under 60% is the market’s “party’s over” signal.
Volatility regime dashboard
IV leads everything else: 60–80% implies quiet grind, 80–110% healthy speculation, 110–150% mania, and a sudden 30-point drop foreshadows brutal gamma unwinds. The highest-IV treasuries routinely outperform Bitcoin multiple times over during bull legs.
Tiering and liquidity moat
Only a handful of names maintain 90%+ IV for months, creating permanent options ecosystems with $20B+ OI books. Lower-IV treasuries trade like sleepy micro-caps no matter how much Bitcoin they hold.
Bottom line
IV is the sector’s adrenaline meter. 100%+ means rocket fuel and expanding premiums; sub-70% means dead gamma and vulnerability. Track it as obsessively as BTC price—spiking IV precedes upside detachment, crashing IV warns of hard resets.
How BitcoinQuant incorporates it
We ingest full-chain IV snapshots intraday—Source: Yahoo Finance options. Weighted average across expiries using OI weights; normalized to annualized terms. Dashboards chart IV trends, color-code regime bands, and trigger alerts when IV spikes or collapses so investors can adjust hedges, yield programs, and capital plans in real time.