IV Rank

As options traders, our edge in the market comes from exploiting mispriced option premiums. Implied volatility often overstates the actual range of a stock which creates an opportunity for option sellers..

One of the ways we gain an "edge" in the market selling options is because IV tends to overstate the actual expected move of a stock.

Understanding the difference between a stock's actual implied volatility and IV percentile is one of the keys to your success as an options trader.

Here is a detailed breakdown of Option Alpha's 7 step entry checklist for filtering and entering new options trades.