Volatility
IV Rank
Also called: IVR, implied volatility rank
IV rank locates today's implied volatility inside its 52-week range on a 0–100 scale: 0 means IV is at its yearly low, 100 at its yearly high. It answers "is IV high for this ticker?" rather than "is IV high in absolute terms?"
Every underlying has its own typical volatility, so a 35% IV is cheap for a biotech and expensive for a utility. IV rank normalizes for that by scaling current IV between the lowest and highest IV readings of the past year. Traders commonly treat IV rank above 50 as favoring premium-selling strategies and readings below 20–30 as favoring long premium.
IV rank has a known weakness: a single volatility spike stretches the range and drags rank down for the rest of the year, even when IV is elevated versus most trading days. IV percentile, which counts days rather than measuring the range, is the usual complement.
Formula
IV Rank = (IV_now − IV_52w_low) / (IV_52w_high − IV_52w_low) × 100
Example
If a ticker's IV ranged from 20% to 60% over the last year and sits at 40% today, IV rank is (40 − 20) / (60 − 20) × 100 = 50.
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Frequently asked questions
What is a good IV rank to sell options?
Many premium sellers look for IV rank above 50, where options are priced in the upper half of their yearly range. It is a relative-value filter, not a directional signal, and it says nothing about why IV is elevated.
Why does IV rank differ from IV percentile?
IV rank measures where current IV sits between the yearly high and low. IV percentile measures the share of days on which IV was lower than today. One outlier spike can push rank down while percentile stays high.