Implied Volatility - Non-constant Implied Volatility

Non-constant Implied Volatility

In general, options based on the same underlying but with different strike values and expiration times will yield different implied volatilities. This is generally viewed as evidence that an underlying's volatility is not constant but instead depends on factors such as the price level of the underlying, the underlying's recent price variance, and the passage of time. See stochastic volatility and volatility smile for more information.