01 Jan 2001, Energy Risk glossary , Energy Risk
The term structure of volatility is the curve depicting the differing implied volatilities of options with differing maturities. The term structure is curved, because the volatility implied by short-dated option prices changes faster than that implied by longer-term options, but other effects, such as mean reversion, may also play a part.
* see also implied volatility
© Incisive Media Investments Limited 2014, Published by Incisive Financial Publishing Limited, Haymarket House, 28-29 Haymarket, London SW1Y 4RX, are companies registered in England and Wales with company registration numbers 04252091 & 04252093