What Is Historical Volatility vs Implied Volatility?
Historical volatility (HV) and implied volatility (IV) are two fundamental measures used by options traders to assess market risk and price options. Historical volatility, also known as realized volatility or statistical volatility, measures how much a stock's price has actually moved over a past period. It is calculated from the standard deviation of logarithmic daily returns, then annualized by multiplying by the square root of 252 (a conventional annualization assumption).
Implied volatility, on the other hand, is forward-looking. It represents volatility inferred from option prices under a model. Market uncertainty, risk premiums and contract terms influence that price. A difference from past realized volatility does not establish overpricing or underpricing.
How to Use This HV vs IV Chart
- 1
Enter a Stock Ticker
Type a supported US stock symbol (e.g., AAPL, TSLA, SPY) to analyze its volatility profile.
- 2
Choose HV Window & Lookback
Select the rolling window for historical volatility calculation (10, 20, 30, 60, or 90 days) and the lookback period for the chart.
- 3
Analyze the Chart
The blue area shows historical volatility over time, while the red dashed reference shows one available call-option IV snapshot. It is not an IV history; a crossing with past HV is not a historical signal.
- 4
Check the Selected Contract
The summary shows the chosen contract, expiry, strike and a difference in percentage points from the latest observed HV. Check the reported sample limits and horizon mismatch before interpreting the comparison.
Why Compare Historical Volatility and Implied Volatility?
Compare Different Measures
HV describes past observations; IV comes from an option price. Compare their assumptions and periods without inferring a buy or sell recommendation.
Inspect the HV Window
Change the return-observation window to see how the realized estimate changes. This page does not contain historical IV or test strategy entry points.
Review Data Limits
A strike-sorted first page can miss the nearest strike or preferred expiry. A separate stock quote can be asynchronous. Inspect the selected contract rather than assuming an ATM market-wide IV.
How Is Historical Volatility Calculated?
Historical volatility is computed using the close-to-close method. First, daily log returns are calculated as ln(Close_t / Close_{t-1}). Then, the standard deviation of these log returns over the chosen window (e.g., 20 trading days) is computed. Finally, this daily standard deviation is annualized by multiplying by √252 and converting to a percentage, using sample variance with an N−1 denominator. HV and IV share annualized units, but their horizons and interpretation differ.
The choice of window matters: shorter windows (10-day) capture recent volatility spikes but are noisier, while longer windows (60-90 day) provide smoother readings but may lag significant regime changes. The default is 20 return observations. Today is excluded to avoid treating an unfinished session as a final close. More than seven calendar days between prices resets the rolling window; shorter missing sessions and corporate-action adjustments remain limitations.
Sources
OIC: volatility and model assumptions · Massive: snapshot limits and availability. Educational comparison; no price forecast or investment recommendation.