What is IV Rank?

IV Rank measures current implied volatility relative to its range over the past year. It tells you if options are "cheap" or "expensive."

IV Rank Explained

  • IV Rank 0%: Lowest IV in past year (options cheap)
  • IV Rank 50%: Average IV
  • IV Rank 100%: Highest IV in past year (options expensive)

    • Why IV Rank Matters

    High IV Rank (60%+): Good for Selling

  • Options are "expensive"
  • More premium to collect
  • Higher probability of profit
  • Best time to sell covered calls/puts

    • Low IV Rank (below 30%): Less Attractive

  • Options are "cheap"
  • Less premium available
  • May want to wait

    • How to Use IV Rank

    | IV Rank | Action | 0-30%Wait or be selective 30-50%Acceptable to sell 50-70%Good time to sell | 70%+ | Excellent time to sell |

    Finding IV Rank

  • Check your broker's option chain
  • Use OptionsPilot's screener
  • Look for "IVR" or "IV Rank" column

    • Example

    AAPL typically has IV of 20-40%:

  • Current IV: 35%
  • IV Rank: 75% (near top of range)
  • Interpretation: Good time to sell premium

    • IV Rank vs IV Percentile

  • IV Rank: Where is IV vs high/low?
  • IV Percentile: % of days IV was lower

    • Both are useful. Most traders use IV Rank for simplicity.