Option prices are routinely quoted in implied volatility, a purely theoretical construct

Evidence

Again, though, derivatives offer the best example of the incorporation of finance theory into the linguistic infrastructures of markets. Options market participants talk all the time about “implied volatility”: indeed, option prices are sometimes quoted not in dollars but in implied volatilities. “Implied volatility” is an entirely theoretical notion, calculated by running an option-pricing model such as Black-Scholes “backwards” to determine the volatility of the underlying asset implied by option prices. — Donald MacKenzie, An Engine, Not a Camera, 1130

Categorization

• DEFINE: Defines ‘implied volatility’ and its calculation by inverting Black-Scholes — a core term the performativity argument hinges on.
• QUESTION: When exactly did quoting in implied volatility rather than dollars become standard practice? Worth chasing the historical timing of this linguistic shift.
• XREF: connects to: By 2000 automated quoting generated prices for options with near-zero actual trading — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 896; Implied volatility reduces diverse option prices to one number, marking Black-Scholes’ cultural imprint — Donald MacKenzie, An Engine, Not a Camera: How Financial…, 1131; Implied volatility turned options of disparate stocks into one comparable metric. — Donald MacKenzie & Yuval Millo, Constructing a Market, Performing Theory, 122 (+1 more)