How to calculate implied volatility with excel
First we go and acquire de data.
On S we put the place for the stock or index or whatever we search for. In this case for example the price of S&P 500 it was 3009.05 today.
Then we select a1 month option with price close to ours, for example 3010
After that we select the interest rate for our risk free .
Finally we have to search for a sigma that makes our observed price igual t the black scholes option price.
When we finish with all then we can calculate the deviation and see how much it can go down and up our stock.
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