> For the complete documentation index, see [llms.txt](https://docs.linora.finance/llms.txt). Markdown versions of documentation pages are available by appending `.md` to page URLs; this page is available as [Markdown](https://docs.linora.finance/trade/mark-implied-volatility.md).

# Mark Implied Volatility

Linora Mark IV calculation depends on the following prices :

* Orderbook Prices : **Bid Price**, **Ask Price**, **Mid Price**
* **Last Trade Price**
* **External Price** : A perpetual option price estimated using external (Deribit) data

By inverting the Black Scholes Pricing formula for perpetual options, a variance σ2σ2σ2σ2 is implied for each of those 5 prices and smoothed using a 5-minute EWMA for the external variance and 15-second for the internal variances (Ask/Bid/Mid/Last)

The **Mark Variance** is then derived by combining the Variance EWMAs :

$$
Mark Variance=Median(Median(Ask Variance EWMA, Bid Variance EWMA, Last Trade Variance EWMA),Mid Variance EWMA,External Variance EWMA)
$$

and Mark IV is finally calculated as the square root of the Mark Variance :

$$
\mathrm{Mark\ IV} = \sqrt{\mathrm{Mark\ Variance}}
$$


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