Implied Volatility
Market’s expected annualized price fluctuation of an asset, derived from option prices.
What is Implied Volatility?
Implied volatility (IV) estimates future asset price movement as implied by option premiums, expressed as a percentage; higher IV inflates option costs. For MSTR, IV at 60.6% as of recent data ranks in the 35th percentile over the past year, driven by Bitcoin exposure.
In Strategy’s converts, high IV (e.g., 80%) makes embedded options valuable, lowering effective interest but increasing sensitivity; a drop to 50% could reduce convert values by 13%.
Related Terms
Secured Overnight Financing Rate (SOFR)
A benchmark rate measuring the cost of borrowing cash overnight collateralized by U.S. Treasury securities in the repurchase agreement market.
MakerDAO (Sky Lending)
A decentralized lending protocol on Ethereum that enables users to lock digital assets as collateral to mint the USDS stablecoin, now operating as the Sky ecosystem with upgraded governance and yield features.
People's Bank of China (PBC)
China's central bank responsible for monetary policy and issuing the digital yuan.
Perpetual Futures
Also called Perpetual Swap, a derivative contract on a Perp DEX allowing traders to speculate on digital asset prices without an expiration date.
Mainnet
The primary, public blockchain network where real-world transactions and digital assets are processed.
Quantum Resistance
Cryptographic designs protecting blockchains from quantum computer attacks on public keys.