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Composite: 82.3/100. All five factors confirm — implied vol is systematically rich vs. realized. 30-day average: 84.1. Short premium structures are supported by broad VRP.
30-day average 84.1 — sustained favorable regime
Conditions favor premium selling (score 82.3/100).
VolRadar Weather Score
Yes — Conditions Favor Sellers
Broad implied-over-realized spread. Standard positioning.
“Term structure in contango, RV declining, breadth positive. Textbook conditions for short premium.”
What to do today
Recommended
Liquid index and mega-caps — outside earnings window.
Avoid
Earnings within 7 days — illiquid single names.
Structures
Iron condors — short strangles, short puts.
DTE
30–45 DTE preferred
Sizing
Full allocation
Favorable regime does not eliminate tail risk. Gap risk and correlation spikes persist regardless of score.
■ ≥65 Favorable · ■ 40–64 Selective · ■ <40 Defensive
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View setups →S&P 500 universe · EOD options data from ORATS + CBOE
Identical VIX level. Same strategy. Opposite outcome. The compositei captured what a single factor missed.
SPY iron condor at VIX 18. Same level, opposite outcome.
VIX ~18 on both days
SPY realized 0.9% over 5 days. Wings at +/-2.3%. Full premium captured.
SPY realized 3.1% over 5 days. Wings at +/-2.3%. Position breached.
VIX read ~18 both sessions. The composite caught what a single factor could not.
VIX read 18 both sessions. Composite identified collapsing VRP breadth and inverted term structure on the Defensive day. The single-factor VIX signal was masking deteriorating conditions beneath the surface.
VIX at 26. Elevated implied vol — but is the VRP actually there?
VIX ~26 on both days
VIX mean-reverted to 20. Short premium collected the reversion.
VIX accelerated to 35. Short premium positions faced margin calls.
VIX read ~26 both sessions. The composite caught what a single factor could not.
Elevated VIX does not guarantee positive VRP. On the Defensive day, realized vol was expanding, VRP breadth was collapsing, and the term structure had inverted. The composite flagged adverse conditions while VIX alone suggested opportunity.
Illustrative scenarios based on historical regime patterns. See VRP validation section for measured outcomes.
Each factor is normalized to 0–100 and contributes its weight to the composite. Bars below show today’s factor scores.
Premium Edge (VRP Breadth)
Percentage of S&P 500 constituents where implied vol exceeds realized vol. Measures breadth of the volatility risk premium across the index.
VIX Regime
Evaluates VIX level relative to the 15-25 mean-reversion zone. Applies spike penalty for 5-day VIX percent changes exceeding +3%.
Volatility Trend
Percentage of constituents where 10-day RV is contracting vs. 20-day RV. Declining realized vol supports short premium positioning.
Earnings Safety
Inverse of earnings density (% of S&P 500 reporting within 7 days). Lower density reduces binary event risk for short premium.
Term Structure
VIX/VIX3M ratio. Contango (ratio < 1) indicates normal term structure. Backwardation (ratio > 1) signals acute near-term stress.
Score = (VRP×0.30) + (VIX×0.25) + (RV×0.20) + (Earn×0.15) + (TS×0.10)
Each factor normalized to 0–100 (higher = more favorable for short premium). Composite output: 0–100.
Five days captures the typical weekly options cycle (Mon–Fri). It balances signal decay against a meaningful outcome window for short premium strategies.
Fixed universe ensures perfect historical comparability. Adding or removing tickers would change the score retroactively, breaking validation integrity.
VIX measures the level of implied vol, not whether it exceeds realized vol. The composite adds VRP breadth, RV trend, earnings density, and term structure — the full picture.
Weather Score determines the regime. Scanner ranks individual tickers by VRP, implied vol, and liquidity within that regime.
AAAA
VRP +6.8pp
Score 79
BBB
VRP +8.2pp
Score 84
CCCC
VRP +5.1pp
Score 72
DD
VRP +7.4pp
Score 81
EEEEE
VRP +9.0pp
Score 88
Free Scanner: 5 tickers · Starter: full rankings, alerts, and historical VRP data
Weather Score is free · Recalculated daily after close
Composite strengthened by 5.1 pts, led by earnings safety, partially offset by premium edge.
Regime validation rate
80.2%
Favorable regime
858 trading days
Implied vs. realized edge
81.2%
All regimes
1333 observations
Score-range hit rate
95.5%
At score 82
Your current decile
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Weather Score is an analytical tool for informational purposes only. It does not constitute financial advice, a recommendation to buy or sell any security, or a guarantee of future performance. Historical model accuracy is not indicative of future results. Options trading involves substantial risk of loss and is not suitable for all investors. Conduct independent analysis and consult a qualified advisor before executing any strategy.
VRP hit rate: Percentage of sessions where forward 5-day VRP breadth remained ≥50% (majority of S&P 500 constituents with positive implied-minus-realized vol spread).
Regime classification: Favorable (composite ≥65), Selective (40–64), Defensive (<40).
Calculation cadence: Recalculated daily at ~6:00 PM ET from end-of-day data (ORATS + CBOE).
Validation sample: 1344 trading sessions (2020-01-01 — 2026-05-07). Forward validation excludes the most recent 5 sessions (pending resolution). Data sources: ORATS, CBOE. Universe: S&P 500 constituents only.