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How accurate is Implied Volatility in predicting future moves?
How accurate is Implied Volatility in predicting future moves? How would you measure this?  If the implied volatility says that there's a 1% chance that a stock will double, and it doubles, was it "right"?  You could also say that it says there's a 99% change that it doesn't double, so was it "wrong"?   What you could measure is the variance of daily returns over a time period, and see how well that compares to implied volatility, but there's no way to compare IV with the absolute price movement.  If a stock goes up 0.01 each day, then the variance is 0 (the daily returns are the same each day), but over 250 the stock would go up $2.50.