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Variance risk premium

Is volatility insurance rich or cheap?
VRP — Implied − Realized (cross-asset)

The variance risk premium across assets — implied minus realized volatility (vol points) for equity (VIX−RV), oil (OVX−RV) and gold (GVZ−RV).

How Each implied-vol index minus the same-horizon annualized realized volatility of the underlying. Positive = options richer than recently delivered moves.Formula VRP = implied vol − 21d realized vol (vol points)Source Cboe (VIX/OVX/GVZ), Yahoo Finance — computed

vol_vrp_panel

How to read Read 'insurance is currently rich/cheap vs recently delivered moves' — a present-state level. Positive = sellers of vol are being compensated now.

DESCRIPTIVE. The literature that VRP PREDICTS returns (Bollerslev-Tauchen-Zhou, BMXZ) is a forecasting result and is NOT built here. Sign convention: implied − realized (positive = implied richer).

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