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The 1 standard deviation price range for a stock over a given timeframe, calculated from volatility. Approximately 68% of the time, the stock stays within this range.
⚡ KEY TAKEAWAY: Sell strikes outside the expected move to stay on the right side of probability ~68% of the time.
Implied Volatility (IV)
Higher IV = more premium to collect when selling options. But also more risk if the stock moves.
Realized Volatility (RV)
When RV is lower than IV, options are overpriced relative to actual movement — the core edge for sellers.
IV Rank
IV Rank > 50 = premiums elevated, good for selling. Below 30 = cheap, consider waiting.
IV Percentile
IV Percentile 80 = IV was lower than today 80% of the time. High percentile confirms elevated premiums.