We used All options OTM, ATM, ITM in the calculation so this shows weighted average.
Black-Scholes Formula uses historical Volatility and assumes probability of price going up and down is same
which is brownian motion.
Calculated All options OTM, ATM, ITM in the calculation so this shows weighted average.
So, skewness shows overall option market position in theory.
Monte-Carlo Formula is just repeating calculation whether stock will go up or down with certain period
Average Implied volatility Monte-Carlo assumes probability stock going up and down will be equal,
show the mean average because the further you go from current price the less likely to be the price will move to that point.
Market Skewed Monte Carlo Uses Eachc Option's implied Volatility,
and give more Emphasis where Moneyness or Open Interest is High.
Weight = Open Interest / (Moneyness + 0.01)
Monte carlo Will be redone, every time you refresh the page, and result will change.