Let's say i have bid / ask feed of an option prices (across strikes and expiries, calls and puts), what is the accurate way of implying out vols from these bid / asks
For eg; to get the bid vol, should i be using the bid prices on calls and puts. To get the ask vol, should i be using the ask prices on calls and puts?
First of all, i will need to use put call parity (for index options) F = (c-p)/DF + K to get the forwards ( i may get slight differences depending on K) but how do i correctly apply the bid and ask option prices here? Should i use bid prices to get a bid? forward which i used to imply the vol (likewise use ask prices to get the ask forward to imply ask vol) or is this not accurate?
Assume i have access to BS model (black76) for implying vols, given price, forwards, rate, etc As you can imagine, im not a quant, just an average joe trying to improve my reporting for the traders and management.