Three IV measures answer different questions
Absolute IV is an annualized volatility input implied by an option price. It is not the premium in dollars or a forecast of direction. Rank locates that IV within a historical range; percentile counts how often the historical series was lower. A 60% IV contract can have a lower historical rank than a 40% IV contract.
| Measure | Worksheet convention | Limitation |
|---|---|---|
| Absolute IV | 40 means 40% annualized IV. | Depends on strike, expiry, model and quote quality. |
| IV rank | 100 × (current − historical low) / (historical high − low) | An outlier changes the range. Constant history has no defined rank. |
| IV percentile | 100 × count(prior IV strictly below current) / count(valid prior observations) | Equal observations are excluded from the numerator. Missing days are not filled. |
Reproduce a cross-contract screen
The fictional worksheet uses October 16, 2026 as its observation date and five daily observations from October 9 through October 15. Both A and B expire on November 20, 35 calendar days later. A has current IV 40 and history 20, 30, 40, 50, 60: rank = 100 × 20/40 = 50; percentile = 100 × 2/5 = 40. The tied 40 is not below the current value.
B has current IV 60 and history 50, 60, 70, 80, 90: rank 25 and percentile 20. Set minimum absolute IV to 35, rank to 40 and percentile to 30: only A passes. B has higher absolute IV but fails both historical thresholds. C has IV 80 and no history, so it fails active rank/percentile filters. Clear those two filters to retain unknown histories for further review.
A has a supplied event on November 10, before expiration. B is marked none only because the fictional calendar was checked. Filter "Before expiry" to isolate event exposure; this is not a forecast of IV collapse or a recommendation to sell A. Five observations illustrate the arithmetic and do not constitute a 52-week estimate.
Align expiry, history and events before ranking
- Load the same expiry and call/put side in the API view. Inspect the chosen strike and stock price. "Nearest" means nearest among returned strikes, not exact 50-delta or a constant-maturity index.
- Use a consistent history definition for the worksheet. Compare daily closes from the same source and window. Do not mix an underlying 30-day index with a single short-dated option. A fixed-contract series changes maturity each day.
- Record the next earnings, regulatory or macro event that matters to the underlying. Compare expirations on the same side of that event. Verify event and settlement times when dates coincide.
- Inspect bid/ask spread, quote age, volume, open interest and exercise terms in your broker or available TradingView contract chart. Confirm the strike and expiration match. Those liquidity and execution checks are not performed by this screen.
Sector values are equal-weight averages of available selected-contract IVs in this fixed stock universe. Missing stocks change the sample, so sector averages are neither market-wide indices nor like-for-like measures of event risk. A low sector average can conceal a high-IV stock; open the sector row before excluding its contracts.
High IV does not establish a selling edge
High IV can compensate for large jumps, difficult hedging and wider spreads. An earnings gap can overwhelm collected premium even if IV falls afterward. A long option can also lose value despite a favorable stock move when IV drops. Position direction, realized movement, Greeks, costs, assignment and capital requirements remain separate decisions. This page is educational screening support, not investment advice.
Sources and data boundaries
Method references: tastylive on rank and percentile, Massive option chain snapshot fields and pagination, and OIC on post-earnings volatility risk. The snapshot endpoint does not supply the historical series used by this worksheet. Refresh requests data; it does not establish a real-time quote entitlement or freshness guarantee.