Loading...
Loading...
The market's forecast of how much a stock will move, derived from option prices. Higher IV means more expensive options.
⚡ KEY TAKEAWAY: 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.
Volatility Risk Premium (VRP)
VRP > +5pp = strong seller edge. VRP 2–5pp = moderate edge. VRP 0–2pp = marginal edge, be selective. VRP < 0 = avoid selling premium.