IV Rank
IV rank shows where current implied volatility sits between its 52-week low and high, on a 0 to 100 scale. Learn how to read it and why it guides buy-or-sell decisions.
IV rank tells you where a stock's current implied volatility sits between its lowest and highest points over the past year, on a scale from 0 to 100. It answers a simple question: is IV high or low for this particular stock right now?
A raw IV number alone is almost useless, because 30% IV might be sky-high for one stock and rock-bottom for another. IV rank fixes that by giving every stock the same 0-to-100 yardstick. Let me show you how it works.
The Thermometer
Think of IV rank as a thermometer for fear, calibrated to each stock's own normal range.
Over the past year, a stock's IV had a lowest reading and a highest reading. IV rank places today's IV on that scale. A rank of 0 means IV is at its lowest point of the year. A rank of 100 means it is at its highest. A rank of 50 means it is sitting right in the middle of its yearly range.
So an IV rank of 80 tells you IV is near the top of where this stock has been all year, options are expensive relative to their own history, regardless of what the raw percentage happens to be.
How to Read It
Because IV tends to be mean-reverting, spiking and then drifting back to normal, IV rank gives you a straightforward playbook.
High IV rank, say above 70. Options are expensive relative to this stock's own year. That favors selling premium, because you are collecting a fat storm premium likely to deflate as IV reverts toward normal. Sellers of a cash-secured put or covered call look for this.
Low IV rank, say below 30. Options are cheap relative to the stock's own year. That favors buying, since you pay little for the storm premium and can benefit if IV climbs back up.
The magic is the comparison to itself. A biotech stock might normally run 60% IV and a utility might normally run 15%, but an IV rank of 90 means the same thing for both: unusually pricey options right now.
The One Catch
IV rank leans heavily on the year's single highest and lowest readings. If the stock had one wild spike, say a one-time crisis, that outlier can stretch the top of the range and squash today's rank downward, making IV look cheaper than it really is.
That is why many traders pair it with IV percentile, which counts how often IV was below today's level rather than relying on just the two extremes. The two together give a fuller read.
- IV rank places current IV between its 52-week low and high, 0 to 100.
- It shows whether IV is high or low for that specific stock.
- High rank favors selling premium; low rank favors buying.
- A single outlier spike can distort it, so pair it with IV percentile.
Pop Quiz
Three quick questions to see what stuck. Pick an answer and the explanation shows up right away.
What does an IV rank of 100 mean?
A rank of 100 places current IV at the very top of its 52-week range, its yearly high.
IV rank is high, above 70. What does that generally favor?
High rank means pricey options relative to the stock's year, which leans toward selling premium.
Why can a single IV spike distort IV rank?
Because it anchors on the single high and low, one outlier can stretch the range and skew the rank.
Bottom Line
IV rank turns a meaningless raw IV number into a clear signal by comparing it to the stock's own year. Zero is the yearly low, 100 is the yearly high, and where you land tells you whether options are cheap or expensive for this specific name.
Use it as a fear thermometer: high rank leans toward selling the fat premium, low rank leans toward buying the cheap one. Just remember it hangs on two extreme readings, so read it alongside IV percentile for the full picture.
Keep going: the forecast it ranks is implied volatility, and its steadier companion is IV percentile.