Implied volatility explained: compare crypto options fairly

An option's price depends on a handful of things: the coin's price, the strike, the time left to expiry, and how much the coin is expected to move before then. All but the last are facts anyone can look up. The last is what traders actually disagree about, and implied volatility is an option's price with everything else taken out.

That's why the site's futures and options pages compare options by implied volatility, not by their price in dollars: across exchanges, it's the one way the same option compares straight across.

What is implied volatility?

Implied volatility is the volatility, a year, that a pricing model needs to arrive at an option's market price. Put the coin's price, the strike and the time to expiry into the model, and the one number left to choose is volatility: the value that makes the model's price match the market's is the option's implied volatility, written as a percentage a year.

The higher it is, the dearer the option. A buyer of an option is paying for movement, so a market that expects bigger moves charges more for the same strike and expiry, and implied volatility says by how much.

What does a volatility of 40% mean?

As a rough guide, divide by 19.1, the square root of 365, for a day: 40% a year is about 2.1% a day. Crypto trades every day of the year, so a year is 365 days of it. On the model's own terms that's one standard deviation: a day's move stays within it about two days in three. Crypto's big moves come more often than that bell curve allows, which is one reason volatility isn't the same at every strike (the volatility smile).

Implied volatility is a price, not a forecast. It's what buyers pay for movement now, and the moves that follow can be well above it or well below.

Why compare options by volatility, not dollars?

Because the same option can cost a different amount on each exchange without any of them being cheaper:

• Each exchange prices from its own forward. An option's value depends on where the coin is expected to be at expiry, and each exchange works that out from its own market. A forward a little higher makes every call a little dearer and every put a little cheaper.
• They quote in different money. Deribit by Coinbase's and OKX's bitcoin options are priced in bitcoin, Bybit's in USDT, so one's price moves with bitcoin's even when nothing about the option has changed.
• They settle on their own index. Each pays out at 08:00 UTC on the expiry date, against its own measure of the coin's price.

Implied volatility takes all of that out. The exchanges publish it with their quotes, each from its own forward; where one gives only a price, the site reads the volatility out of it with the same model the exchanges price with (Black's). Then it compares the same strike on the same expiry, to a tenth of a point.

How close are the exchanges?

Near the money, usually very close. On 14 October 2026, bitcoin's options for 30 October were at 33.7% at the money on Deribit by Coinbase, 33.5% on OKX and 33.7% on Bybit, though Deribit by Coinbase held 88% of bitcoin's options open interest. They price with the same model, and a trader who found one exchange a point dearer could sell there and buy on another.

Across expiries, the volatilities differ more than the exchanges do. A coin's options at the money, expiry by expiry, might read:

Example figures, not market data.

The later the expiry, the higher the volatility here: traders pay more, a year, to be covered for a year than for a fortnight. That curve, volatility by expiry, is the term structure. It usually rises like this when markets are calm, and can turn the other way in a sell-off, the nearest expiries the dearest.

Bid and ask, in volatility

Each quote has two sides, and the site shows both in volatility: the bid, the most a buyer will pay, and the ask, the least a seller will take. The best bid is the highest of the exchanges', the best ask the lowest, and the gap between an exchange's own two is its spread, in volatility points.

The biggest exchange isn't always the best price. The same day, over bitcoin's 18 calls and puts nearest the money on 30 October, the best bid was Bybit's on 14 and OKX's on 5, and the best ask OKX's on 14 and Bybit's on 5 (a tie counts for each), while Deribit by Coinbase, with most of the open interest, had the best of neither.

How to read an option chain goes through quotes like these strike by strike.

How to read it on the site

1. Open the futures and options index. For each coin, At the money is its volatility for the next monthly expiry, from the lowest exchange to the highest.
2. Open a coin's page, Bitcoin's for one. Options by expiry gives each exchange's volatility at the money for each expiry, and the Gap between the highest and the lowest, in points.
3. Further down, Bitcoin options by strike shows every exchange's bid and ask for one expiry, the best of each marked. Switch Volatility to Price to see them in money.
4. To see which exchange is quoting tightest across every coin, the scoreboard counts how often each has the best bid and ask.

What implied volatility leaves out

• What you'd pay in money. Volatility compares; your account pays in the coin or in dollars, at the exchange's own forward.
• Fees. Each exchange charges its own for options, and they differ from its fees on spot and perpetuals.
• Size. The best price may be for a fraction of a coin; beyond it, the next quote can be some way off.
• Time. It's now. Volatility jumps when the price does, and before big events.

Not financial advice. Prices move while you read them.