Learn about IV Ranks and how they relate to the markets and options trading.
IV Rank (Implied Volatility Rank) is a metric that compares the current implied volatility (IV) of an option to its historical range of implied volatility over a specified period (typically one year). It is calculated as: (Current IV - Minimum IV) / (Maximum IV - Minimum IV). IV Rank is expressed as a percentage and helps traders understand whether the current IV is high or low relative to its historical range. For example, an IV Rank of 80% means the current IV is higher than 80% of its historical values.