Implied volatility is a number displayed in percentage terms reflecting the level of uncertainty, or risk, perceived by traders. IV readings, which are derived from the Black-Scholes options pricing model, can indicate the degree of variation expected for a particular equity index, stock, commodity, or major currency pair over a stated period of time. For instance, the popular VIX Index is simply the 30-day implied volatility reading for the S&P 500. A high VIX level (i.e. percent), or high implied volatility reading, indicates that risk is relatively elevated and there is a greater chance of larger than normal ... (full story)