February 18th, 2009, 2:22 pm
Hello all,I am looking into this volatility topic and, browsing through the forum, it appears there are a lot of posts but they are quite fragmented...my questions are, I think, quite simple and straightforward:1)what are the definitions of BPvol, yield vol and price vol? (looking for something: "BPvol is the volatility of .... expressed as ..... and computed as ......")2)what instruments are quoted using which vol? i.e. swaptions quoted vols are, for example (not sure if this is the case) yield vol, etc3)how can we use these vols? what kind of info can we extrapolate from them?Any other insight on the topic very welcome..but please keep in mind that, for now, I am looking to straight answers in order to get a first understanding of the topic and after this any digression would be very welcome.ThanksG.