#iv-rank

IV Rank, IV Percentile, and Skew: The Three Numbers That Price Every Option

Raw implied volatility is a useless headline number — a 45% IV is cheap on a biotech and expensive on KO. IV rank, IV percentile, and skew answer different questions about where vol sits in its own history, and traders who confuse them pay for the confusion in credit spreads sold into cheap-looking vol that isn't cheap.