Implied Volatility vs Maximum Pain

The annualized standard deviation of price returns implied by the current market price of an option, derived by solving the Black-Scholes model backwards from observed market price; forward-looking measure of expected future volatility; distinct from historical volatility which measures past realized movement.

The options strike price at expiration where the total value of all in-the-money calls and puts combined is minimized, allowing options sellers to retain maximum premium.