ATM IV Term Structure refers to the relationship between the at-the-money (ATM) implied volatility (IV) of an option and the time to expiration (tenor) of that option. It essentially shows how the implied volatility of an option changes as the expiration date increases or decreases.
The ATM IV is the implied volatility of options where the strike price is closest to the current price of the underlying asset. Implied volatility represents the market’s expectation of future price fluctuations.
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