Implied volatility (IV) is the market's expectation of how much a stock will move — and it's the single biggest driver of the premium you collect. IV Rank tells you where current IV sits relative to its own recent range.
What IV Rank Measures
IV Rank ranges from 0 to 100. A rank near 100 means volatility is unusually high compared to the past year — options are rich and premium is plentiful. A rank near 0 means volatility is compressed and premium is thin.
Sell High, Manage Low
- Sell premium when IV Rank is elevated — the market pays you the most to take the obligation.
- After an event crushes IV, premium shrinks — often a good time to manage or close.
- Avoid forcing trades when IV Rank is near zero — the income isn't worth the risk.
Why It's the Premium Multiplier
Two identical puts on two different days can pay very different premiums — entirely because of IV. Selling when IV Rank is high means you collect more for the same risk, and you benefit when volatility mean-reverts downward. IV Rank is where the edge is priced in.