May 6, 2019 at 10:37 PM #93382
Are u using iv rank or iv percentile? Since iv is mean reverson, we should know what is high iv and low iv. So how u prediict it?
May 6, 2019 at 11:04 PM #93684
It depends on what kind of market you are referring to.
I can relate to one of Nitin Ji’s Option Chain videos where he mentioned the following:
1. In Bull Market: High IV at ATM would be 21 – 24
2. In Bull Market: Low IV at ATM would be 15 – 16
3. In Bear Market: High IV at ATM would be 38 – 40
4. In Bear Market: Low IV at ATM would be 21 – 22
5. In Range Market: High IV at ATM would be 20 – 21
6. In Range Market: Low IV at ATM would be 12 – 13
For an example, around 9.68 IV for a strike suggests the market is in range and the IV is low. Hence, we can buy Call options but we should not sell Put options.
Hope this helps.
Please correct me if the information I furnished above are wrong.
Thanks & Regards,
May 7, 2019 at 8:48 AM #94092
May 7, 2019 at 1:21 AM #94029
IV Rank: Rank the current implied volatility against the historical implied volatility range (IV High – IV low), typically over a one-year period.
IV Percentile: Tell us the % of time in the stock’s implied volatility was lower than the current implied volatility over a historical period-typically 1 year.
Which one we should is subjective.
May 7, 2019 at 1:32 PM #94479
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