different IV% data in IB software.

it confounds me why the option's, bid, ask, greeks data in my IB software match with other reliable sources of data, eg www.optionseducation.org OR http://www.option-price.com/implied-volatility.php (both ~match) when the underlying is at same price, BUT the IV% is so far out from my IB software,

why is there such a difference from the accurate, reliable and matching data sources for IV% ?
kindly look at attachment which show this, the red rectangles show the corresponding just about matching data, yellow circles show the very different IV, 143C, Aug 24th.

 

In your example, the two calculations are far enough apart to indicate that one is probably wrong. Do you know which one?

 

I think they are both right, looks like one is daily and the other one annual. Just out of curiosity, where do you get the data for the screenshot on the right?

 

Yep, that looks right: 0.7204%*sqrt(260)=11.62%

 

kapw7, the screen to right is from www.optionseducation.org , theyre real good options site with great customer support.
u trade options with IB as well? just pm me

 

thanks for letting us know MTE, if one is annual other is daily why not just *360 , why 260? and why do u have to take the square root?
IB is the daily IV ? how do we set the IB's IV so it is the same?

 

There are about 260 trading days in a year. Generally speaking trading days are used and not calendar.

The reason you have to take the square root is because volatility increases with the square root of time. In other words, in order to scale volatility to different time frames you need to use the square root of time. The reason being that volatility is standard deviation and standard deviation is the square root of variance. So since variance increases linearly with time, standard deviation increases with square root of time.

 

252 is the US market convention (for thins like variance swaps). Multiplying daily vol by 16 works well enough.

 

Yeah I know, but some use 260 (e.g. bloomberg has 260 as default). With respect to this thread it's a minor point really. Because if you want to compare different sources you have to know what they use to annualize.