Implied volatility

Definition:

The expected volatility in a stock's return derived from its option price, maturity date, exercise price, and riskless rate of return, using an option pricing model such as Black-Scholes.

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Copyright © 2011 Campbell R. Harvey, Professor of Finance, Fuqua School of Business at Duke University

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Lapsed option

An option that no longer has any value because it has reached its expiration date without being exercised.

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