Originally Posted by nickola.pazderic
It is only rich if the Historic Volatility for the next 20 days (or so) is below an annualized 30% volatility.
IV is forward looking while HV is looking back in time.IV is the expected, while HV is the realized.
To find out if IV was correct you will need to slide the HV graph back (20 to 30 days)
check this for a read on how the vix is calculated. http://www.cboe.com/micro/vix/vixwhite.pdf
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