Volatility

Volatility is what makes options interesting. If the underlying never moved, options wouldn't have any extrinsic value — there'd be nothing to price. But volatility isn't one number. Implied volatility (what the market expects, embedded in option prices) and realized volatility (what actually happens) routinely disagree, and the gap between them is the structural reason short-premium strategies have a positive expected value on average.

This module covers what IV is, what it tells you, and where it breaks down. Implied vs Realized Volatility is the central one — what IV represents, what it doesn't, and what it means when the two diverge. Expected Move turns IV into a usable dollar range — the 1-σ band, the ATM-straddle shortcut, and the sqrt(T) scaling that explains why 0DTE expected moves are large in dollars even at moderate IV. The Volatility Smile and SPX Skew covers why OTM puts cost more than equivalent OTM calls on index options, which is the structural fingerprint of dealer hedging and demand for downside protection. VIX, VIX1D, and the Term Structure sorts out which VIX variant measures what and which one matters for 0DTE positioning. How IV Moves Intraday covers the morning IV crush, news repricings, and end-of-day vol dynamics that are specific to expiration day.

This module sits between the greeks (where vega measures sensitivity to IV) and the strategies module (where understanding what IV is doing is what distinguishes a thoughtful trade from a coin flip). You don't need all of it to start trading, but skipping it means operating on intuition that's often wrong.