The document discusses implied volatility, an alternative to the Black-Scholes model for estimating the volatility of an asset. It describes using the binomial model and Newton-Raphson iteration to estimate implied volatility from option prices. Practical applications of implied volatility include forecasting volatility and using it as an input for risk models. The next steps proposed are to program the Newton-Raphson algorithm for a distributed environment and consider estimating a volatility surface rather than a single value.