I'm trying to understand implied volatility (IV) better. Recently, I was looking at $YUMC's option chain (date: 07/10/2017) and in particular the 27.5 strike price with an IV of 0%.
I'm trying my best to understand why the 27.5 strike price has an IV of 0%, but the strike price directly above it and below it have an IV of 56.63% and 97.75% respectively.
As I understand it, implied volatility represents the expected gyrations of an options contract over it's lifetime.
So it bewilders me how the IV can be 0% at 27.5, but greater than 0% for strike prices just above and below, it makes no sense and I have no idea how to interpret it.
I even tried staring at the math behind the options pricing model to see if that could make more sense for me but that didn't help.
If anyone could help me better understand and interpret this I would really appreciate it. Thanks!