IV Rank (IVR)¶
OVERVIEW¶
IV Rank (IVR) measures where a security's current implied volatility sits relative to its 52-week high and low, expressed as a score from 0 to 100. An IVR of 100 means current implied volatility is at its highest point of the past year; an IVR of 0 means it is at its lowest.
IVR answers a question raw IV cannot: is implied volatility elevated or depressed right now compared to where it has been?
Note
IVR is backward-looking and asset-specific. It makes no prediction about the direction of the underlying security.
FORMULA¶
The result is always between 0 and 100, regardless of the underlying asset's absolute IV level.
WORKED EXAMPLE¶
The following example uses AAPL on the day before an earnings report.
| Input | Value |
|---|---|
| 52-Week IV High | 48 |
| 52-Week IV Low | 17 |
| Current IV | 41 |
An IVR of 77 means AAPL's options are pricing in volatility at the 77th percentile of the past year — options are relatively expensive.
Tip
A premium seller using a short strangle, iron condor, or cash-secured put would view an IVR of 77 as a favorable entry. An options buyer is paying above-average premium at this level.
IVR VS. IV PERCENTILE¶
Many platforms display IV Percentile and label it as IVR. These are distinct calculations.
| IV Rank (IVR) | IV Percentile | |
|---|---|---|
| How it works | Compares current IV to the 52-week high and low | Counts trading days in the past 252 sessions where IV was below today's level |
| Calculation | Range-based (high/low anchor) | Day-count ratio (252-day window) |
| Effect of a single IV spike | Spike raises the denominator, pushing IVR down toward 0 for months | Spike affects only one day count; impact is smaller |
| Best used when | Simplicity and wide citation matter | A single outlier event distorts the 52-week range |
| Robustness | Lower — sensitive to outliers | Higher — more stable around one-off events |
Note
A stock with one extreme IV spike in the past year will show a very high IVR (the spike sets the denominator high) but a moderate IV Percentile (most days still had lower IV than today). When in doubt about which reading to use, cross-reference both.
WHEN TO USE IVR¶
Options premium sellers screen for IVR to confirm they are selling when premiums are inflated relative to the asset's own history.
| IVR Range | Signal for Premium Sellers |
|---|---|
| 0 – 19 | Below-normal credit — avoid selling premium |
| 20 – 49 | Marginal — use with additional confirmation |
| 50 – 100 | Favorable — premiums elevated relative to history |
Options buyers use IVR to avoid overpaying for vega exposure.
| IVR Range | Signal for Options Buyers |
|---|---|
| 0 – 20 | Favorable — below-average cost for calls, puts, debit spreads |
| 21 – 69 | Neutral — assess catalyst strength vs. premium cost |
| 70 – 100 | Unfavorable — elevated premium collapses after catalyst resolves |
Tip
Combine IVR with the VIX for additional context. A stock with IVR of 80 while VIX sits at 12 signals that stock-specific event risk — not broad market fear — is driving elevated premiums.
LIMITATIONS AND COMMON MISCONCEPTIONS¶
Note
IVR is not a directional signal. High IVR indicates expensive options — it does not predict that the underlying will fall.
IVR is backward-looking. A reading of 90 does not guarantee IV will revert downward. Implied volatility can persist at or above its annual high when an ongoing catalyst (regulatory action, recurring earnings beats) continues to drive uncertainty.
A single outlier event can distort IVR for up to 52 weeks. A stock that gaps 50% on a takeover bid may show IVR at or near 100 for the following year even when current options are priced at entirely normal levels. In this scenario, IV Percentile more accurately reflects true market conditions.