It's not really implied volatility, it's the actual volatility between now and expiration. Everyone can only estimate at what that will be.
IV is essentially using prevailing prices to understand what everyone else has estimated that forward volatility to be.
Beyond that, you will also find that IV differs across strikes [1]. Still, being able to fit a vol smile from incomplete market data (and some other adjustments if you are very sophisticated) and then price an arbitrary option is pretty useful.
IV is essentially using prevailing prices to understand what everyone else has estimated that forward volatility to be.
Beyond that, you will also find that IV differs across strikes [1]. Still, being able to fit a vol smile from incomplete market data (and some other adjustments if you are very sophisticated) and then price an arbitrary option is pretty useful.
[1] https://en.wikipedia.org/wiki/Volatility_smile