implied volatility surface

The implied volatility surface is a graphical representation used in finance to show how the market's expectations of future volatility (uncertainty) for an asset vary based on different strike prices and expiration dates of options. Typically, it has three dimensions: the x-axis represents the strike prices, the y-axis represents time to expiration, and the z-axis indicates the implied volatility. This surface helps traders understand how options are priced, as volatility affects risk and potential returns, revealing patterns in market sentiment regarding future price movements.