Volatility Smile (& Volatility Surface)

Volatility (a measure of risk) is a common feature of financial markets. When prices are subject to major changes, investors want to know how likely it is that the current price will continue unchanged over the next day or period.

A volatility surface is a graphic representation of the variability of prices across an extended period of time.

Volatility smile is a bullish or bearish moving average that reflects recent price movement.

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