Volatility
What is IV Percentile (IVP)?
Shows the percentage of days over the past year that IV was lower than today.
📖 Complete Definition
IV Percentile measures what percentage of trading days in the past year had lower implied volatility than today. An IV Percentile of 85 means IV was lower than today on 85% of days in the past year. Some traders prefer IV Percentile over IV Rank as it accounts for the full distribution of IV values, not just extremes.
📐 Formula
IV Percentile = (Days with IV < Current IV) / Total Days × 100
💡 Examples
- →IV Percentile of 95% means today's IV is higher than 95% of the past year
- →IV Percentile accounts for the full distribution, not just high/low extremes
❓ Frequently Asked Questions
Should I use IV Rank or IV Percentile?
IV Percentile is often more reliable as it considers all data points, not just extremes. However, both are useful and some traders use both together.
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