Implied versus realized volatility
Implied volatility (IV) is the volatility input that reconciles an option pricing model with an option price. It is quoted on an annualized basis. Realized volatility measures past price variation; implied volatility reflects the price of uncertainty over the option's remaining life. Neither tells you the direction of the next move. See Bybit's introduction to IV for the distinction.
Our Bitcoin IV page uses exchange mark IV, not the last traded premium or an executable bid or ask. The option ticker documentation separates these fields. The comparison there uses 30-day realized volatility from daily log returns on Binance USDT perpetual candles, annualized with √365, as in the realized volatility screener. A historical window and a forward-looking expiry cover different periods and instruments: IV minus RV is a comparison, not a guaranteed trading profit.
Read the smile across strikes, the term structure across expiries
A volatility smile plots IV against strike for one expiry. Higher IV in both wings than near the money makes a U shape; an uneven curve shows skew. Real curves need not be symmetric. Comparing different expiries on one curve can confuse time effects with strike effects. Bybit's skew guide distinguishes strike and expiry comparisons.
The site's ATM term structure compares at-the-money IV across expiries, using the forward price as the ATM reference. It answers how annualized pricing differs by maturity. A high near-term point can coexist with lower longer-term IV; it does not imply a larger absolute move over the shorter interval. Check expiry, observation time and venue coverage before comparing two points.
A worked 25-delta risk reversal
Delta describes an option's model price sensitivity to the underlying. Here “25-delta” pairs a call at +0.25 delta with a put at −0.25 delta for the same underlying and maturity. They usually have different strikes. It is not a promise of a 25% chance of an outcome.
RR25 = 25-delta call IV − 25-delta put IV. Assume a hypothetical matched-expiry call IV of 60% and put IV of 65%. Then 60% − 65% = −5 vol points. In decimal inputs this is 0.60 − 0.65 = −0.05, displayed as −5 percentage points of annualized volatility. These are illustrative inputs, not current quotes. The exchange's mark IV and delta fields provide the kind of observations used by our IV tool; the call-minus-put sign convention is the site's methodology.
A negative RR25 means the put carries higher IV; positive means the call carries higher IV. “Put skew” uses the opposite sign. A 5% relative increase from 60% IV would instead be 60% × 1.05 = 63% IV, just 3 vol points higher. Going from 60% to 65% is 5 vol points, or about 8.33% relative to 60%. RR25 compares two options, not a change through time. Higher put IV can reflect demand for protection; it does not establish that the underlying will fall.
How this site matches strikes and expiries
For each expiry, ATM IV is interpolated linearly in strike around the forward. Call and put IV at 25 delta are interpolated separately in delta between nearby listed observations. If exchange delta is missing, the existing engine can estimate it with Black-76 using mark IV. When a target delta is outside the listed range, the nearest observation is accepted only within 0.05 delta; otherwise that point is unavailable.
The 30-day constant-maturity series is a constructed estimate, not necessarily a listed contract. It uses an exact maturity when available; otherwise each IV series is interpolated between surrounding expiries in total variance, IV² × time in years. The call and put IVs are each converted back from variance before subtraction to produce RR25. The engine does not simply average the two expiries' risk reversals or extrapolate beyond the available maturity range.
Coverage and assumptions matter
The options overview and IV tools show only currently eligible venues, not the whole options market. Check the tool's source labels and timestamps. Sparse strikes, missing mark IV or delta, and absent surrounding expiries can leave gaps. A blank 30-day figure is not zero IV. Mark prices and interpolated points are estimates, and sparse or stale observations may differ from prices at which you can trade.
Annualization makes units comparable; it does not make returns normally distributed or volatility constant. Any conversion of IV into a future price range requires additional assumptions about time and returns. Observed IV guarantees neither that range nor a future return.
Checked against the exchanges' own documentation on 13 October 2026: Bybit: implied volatility · Bybit: volatility skew · Bybit API: option ticker fields. Not financial advice.