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The Weather Score is a daily 0–100 composite that tells premium sellers whether market conditions favor entering new positions. It blends five volatility signals — Premium Edge, VIX Regime, Volatility Trend, Earnings Safety, and Term Structure — each weighted by its predictive importance. A score of 65 or above means conditions are Favorable; below 40 means Defensive. The score is calculated exclusively from S&P 500 stocks, providing a fixed, comparable standard regardless of how many tickers the Scanner covers.
Just as a weather forecast tells you whether to carry an umbrella, the Weather Score tells premium sellers whether market conditions favor entering new positions. Each of five components scores 0–100, then they are combined using fixed weights to produce the final score.
What percentage of S&P 500 stocks have positive VRP (overpriced options). Higher = more candidates with edge.
Is VIX in the ideal 15–25 range for selling? Adjusts for spikes and declines. Too low = thin premiums; too high = excessive risk.
Percentage of stocks with declining short-term RV vs longer-term RV. Higher = market calming down = safer to sell.
Fewer stocks reporting earnings within 7 days = less surprise risk. Penalizes heavy earnings weeks. The per-ticker screener also uses a 7-day hard block for strategy generation.
VIX/VIX3M ratio. Contango (ratio below 1.0) = normal, good for sellers. Backwardation (above 1.0) = stress, bad for sellers.
Score = (Premium Edge × 0.30) + (VIX Regime × 0.25) + (Vol Trend × 0.20) + (Earnings Safety × 0.15) + (Term Structure × 0.10)Example: Premium Edge = 72, VIX = 85, Vol Trend = 60, Earnings = 90, Term Str = 80:
Score = (72 × 0.30) + (85 × 0.25) + (60 × 0.20) + (90 × 0.15) + (80 × 0.10) = 21.6 + 21.25 + 12 + 13.5 + 8 = 76.4Score 76 — favorable conditions for premium selling with standard sizing.
VolRadar implementation: Each component scores 0–100 individually. VRP Breadth and VIX data from the daily pipeline. Computed after market close (~6:00 PM ET).
65–100Most conditions support premium selling. Enter new positions with standard sizing.
40–64Mixed conditions. Be selective — focus on individual tickers with the strongest signals.
0–39Defensive conditions. Reduce exposure, avoid new positions, or use defined-risk strategies only.
Score of exactly 65 = Favorable (inclusive). Score of exactly 40 = Selective (inclusive).
The Weather Score is calculated exclusively from S&P 500 stocks (approximately 500+ components). ETFs such as SPY, QQQ, GLD, and TLT are included in the Scanner for individual analysis but are excluded from the Weather Score calculation. This ensures the score remains a consistent, comparable standard — today’s 72 means the same as 72 six months ago, regardless of how many tickers the Scanner covers.
The Weather Score is a market-wide reading. Even when the score is high, individual tickers may be unfavorable (upcoming earnings, high RV Ratio, negative VRP). Conversely, a low market score doesn't mean every ticker is bad. Use the Weather Score to set your overall risk appetite, then use the Scanner to find the specific best setups.
How well does the Weather Score predict favorable premium selling conditions? Based on the last 252 trading days of historical data (note: model parameters were calibrated on a portion of this same data — treat as directional, not out-of-sample):
73%
VRP positive when score ≥65
Favorable regime · in-sample
54%
VRP positive when score 40–64
Selective regime · in-sample
31%
VRP positive when score <40
Defensive regime · in-sample
Interpretation: When the Weather Score is 65 or above, the broad market VRP (implied minus realized volatility) was positive 73% of the time — meaning options were overpriced relative to actual movement, favoring premium sellers. When below 40, VRP was positive only 31% of the time. The score doesn’t predict individual trade outcomes, but helps you pick days with the odds in your favor.
Based on S&P 500 VRP (IV30d − HV20d) outcomes over the last 252 trading days. Past performance is not indicative of future results.
A score of 65 or above indicates favorable conditions. Scores 40–64 are selective (focus on strongest setups). Below 40 is defensive — reduce exposure or sit out.
Daily after U.S. market close using end-of-day ORATS data. The pipeline typically completes by ~6:00 PM ET.
Premium Edge (VRP Breadth, 30%), VIX Regime (25%), Volatility Trend (RV trend, 20%), Earnings Safety (15%), and Term Structure (term structure, 10%). Each scores 0–100.
No. The score is a market-wide reading. Individual tickers may still be unfavorable. Use the Scanner and ticker pages to find specific setups.