Almost all futures–related documents carry the warning, "Past performance is no guarantee of future results," or words to that effect. Most traders and analysts turn their backs on that warning by repeatedly using measures of past performance, such as historical volatility, to predict future results.

The past is a notoriously unreliable indicator of the future, especially in markets. Relying on historical volatility is comparable to driving a car while looking only in the rearview mirror. The same can be said for many other market statistics.

Implied volatility, in contrast, is a forward–looking market estimate of what the volatility of a market will be at option expiration. Because of this, implied volatility has predictive content. It is not absolute, to be sure; after all, markets change. But with a little work, implied volatility can be useful.