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Where current implied volatility stands relative to its 52-week range, expressed as 0–100. Formula: (Current IV − 52-week Low) / (52-week High − 52-week Low) × 100. IV Rank 75 means current IV is near the high end of its annual range.
⚡ KEY TAKEAWAY: IV Rank > 50 = premiums elevated, good for selling. Below 30 = cheap, consider waiting.
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 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.