Options & futuresAdvanced
Implied volatility (IV) is the annualized volatility of the underlying asset that, when entered into an option pricing model, reproduces the option's current market price. It reflects how the market is pricing future movement, not a measured past quantity.
Market mechanicsBeginner
An index is a calculated measure of the combined performance of a defined group of securities or other assets, such as a market, sector or asset class. It is a number rather than an investment, and it is built to a published rulebook.
Market mechanicsIntermediate
Index weighting is the rule that sets how much each constituent contributes to an index's return. Common schemes include market-capitalization (often free-float-adjusted) weighting, equal weighting, price weighting and factor- or fundamental-based weighting.