A volatility value that is implied from an option pricing model (like the Black-Scholes model) representing the standard deviation of the price of the security underlying an option as determined by the market price of the option. The implied volatility, therefore, is affected by the exercise price, the risk-free rate, the maturity date and the current price of an option. The implied volatility increases in value in riskier or more volatile markets (bear markets) and decreases in less risky or less volatile markets (bull markets).