Hagan's Theorem is a mathematical principle used in finance, particularly in the pricing of options. It provides a way to calculate the implied volatility of options based on their market prices. This theorem is particularly useful for traders and analysts who need to assess the value of options in a dynamic market. The theorem is named after Mark Hagan, who contributed to the development of this concept. By applying Hagan's Theorem, investors can better understand the relationship between the price of an option and the underlying asset's volatility, aiding in more informed trading decisions.