Implied Volatility is a measure used in finance to estimate the future volatility of an asset's price, often derived from the prices of options. It reflects the market's expectations of how much the asset's price will fluctuate over a specific period. Higher implied volatility suggests that the market anticipates larger price swings, while lower implied volatility indicates more stable price expectations. Traders and investors use implied volatility to gauge market sentiment and make informed decisions. It is a key component in options pricing models, such as the Black-Scholes Model, helping to determine the fair value of options contracts based on anticipated price movements.