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Realized volatility divided by implied volatility (RV/IV). Below 1.0 means the stock is moving less than options imply — favorable for selling premium. Below 0.85 is especially strong.
⚡ KEY TAKEAWAY: RV Ratio < 0.85 = strong edge for sellers. Think of it as a speedometer check: is the stock actually moving as much as options predict? Below 1.0 means no — and that gap is your edge.
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.