The flat volatility of a cap is the single volatility at which the sum of its caplets’ prices equals the cap’s price. A caplet volatility is the volatility of one caplet, a function of its fixing date (and strike); the caplet volatilities of all caps of one strike form a single term structure.
Quantitative Finance · Glossary
What is Flat volatility, caplet volatility?
Also known as: flat volatility · caplet volatility