Glossary
Implied volatility
The market's expectation of future movement, baked into the option's price.
What it is
Implied Volatility (IV) is the market's forecast of how much a stock will move, expressed as an annualized percentage and derived from current options prices. High IV = expensive options. Low IV = cheap options.
IV usually spikes before earnings and binary events, then collapses immediately after — this is called "IV crush."
IV Rank
IV Rank compares current IV to the stock's 52-week IV range. An IV Rank of 80 means current IV is in the 80th percentile of its yearly range — historically expensive. High IV Rank is favorable for premium selling (CSPs, covered calls); low IV Rank favors buying options (LEAPS, directional calls).
How to use it
Before buying options, check whether IV is elevated. Buying calls right before earnings when IV Rank is 90+ means you are overpaying — even a correct directional move can lose money if IV crushes faster than the underlying moves. The LEAPS Scanner targets strikes with favorable extrinsic efficiency partly because of this dynamic.
Where you will see it
- Earnings FlowPre-earnings institutional positioning and post-earnings follow-through, so you see how the smart money is playing the print.
- LEAPS ScannerLong-dated calls and puts that let you own the thesis for pennies on the dollar: conviction bets with months to be right, not days.
- Cash-Secured PutsPuts you would be happy to be assigned on, ranked by weekly return on capital with probability of profit and breakeven precalculated.