Questions tagged [implied-volatility]

The implied volatility of an option contract is that value of the volatility of the underlying instrument which when input in an option pricing model such as Black–Scholes will return a theoretical value equal to the current market price of the option.

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Why do options get more volatile, as time approaches the earnings date?

Doesn't the increased in implied volatility infringe the semi-strong form of the EMH? Whether you buy options 7 or 1 day before the earnings date, you still don't know any more about the actual ...