AdvancedMultiple choice
One-month implied volatility is well above one-year implied volatility. What does that suggest?
- AA quoting error, since longer options must always imply more
- BA near-term event or stress the market expects to pass
- CThat the long-dated options are mispriced and should be bought
- DThat realised volatility has been rising steadily for a year
The worked solution is in Premium
The answer, the full working and the one idea to take away – for this and all 1,322 questions in the bank. Answer it in practice and your working is marked, with a known mistake named when you make one.
Learn the method
Reported in interviews at
More volatility questions
- A name has 32% annualised volatility.Foundation
- Implied volatility is 25% and expiry is 63 trading days away, out of 252 in a year.Foundation
- A weekly at-the-money straddle on a $100 stock costs $4.Foundation
- Pricing an earnings move, part 1 of 3Foundation
- A name moves 2% a day.Applied
- On an equity index, out-of-the-money puts consistently imply higher volatility…Applied