VolatilitySurface - crowlogic/arb4j GitHub Wiki

A volatility surface is a three-dimensional representation of implied volatilities across various strike prices and expiration dates for a given underlying asset. It is an extension of the volatility smile concept and provides a more comprehensive view of the market's expectations of volatility.

The volatility surface combines multiple volatility smiles, each representing a specific expiration date, into a single 3D plot. The x-axis represents the strike prices, the y-axis represents the time to expiration, and the z-axis represents the implied volatilities.

The volatility surface helps traders and risk managers analyze the market's expectations of future volatility, as well as the relative pricing of options with different strikes and maturities. This information is valuable for options strategies, hedging, and arbitrage opportunities.