I am working on a Quiz that asks why the 6 month forward volatiliy could be greater than the 6 month current volatility.

I would first like to clarify if I understand the Question correctly. When we talk about the 6 month current volatiliy, which timeline do we look at? Is the current 6 month volatility the volatility from 6 months ago to today (the realized vol)? And is the 6 month forward volatility the volatility we expect from today until 6 months in the future?

I expect the answer to be something like an event is happening during the time span of the forward volatility like the US election for example.

I am very happy about any clarification!

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    $\begingroup$ It's a very imprecise quiz question indeed. Are there no further details provided in the quiz queston? $\endgroup$ Dec 11, 2021 at 14:56
  • $\begingroup$ Unfortunately, there were no further details. I would just write what I assume as it's a bit vague. Thank you for responding! $\endgroup$ Dec 11, 2021 at 18:01
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    $\begingroup$ I would guess the question is asking about the difference between the vol of a 6 month option starting today , versus the forward vol of an option starting in 6 mo and ending in 1yr. Just a guess $\endgroup$
    – dm63
    Dec 14, 2021 at 2:39


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