Question

Are the implied volatilities the same for all the options? If not, what could be some...

Are the implied volatilities the same for all the options? If not, what could be some potential reasons?

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Answer #1

Implied volatilities are not the same for all options.

Implied volatility is the probabilistic measure to calculate the value of options which can have underlying asset like a stock. So if the volatility of the stock price was higher in the past due to macroeconomic factors prevailing in the economy, its implied volatility would be higher on the options whereas if the stock price was stabled like in the situation of a turmoil, its price volatility on the option would be much lower and all the factors affecting fluctuations in the stock price like interest rates, exchange rates can cause an effect in the implied volatility.

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