The Unlucky Investor's Guide to Options Trading guides readers through the world of options and teaches the crucial risk management techniques for sustainable investing.
At tastytrade, we pay more attention to IV rank than pure IV as it provides more context. Different strategies present themselves in low IV and high IV environments. We prefer to sell premium in high IV environments, and we may buy debit and calendar spreads in low IV environments. Since IV is the most mean reverting function in finance, deploying these strategies at extremes allows us to add another dimension to our profitability. Instead of price direction or duration, we can now profit from an expansion or contraction in IV.
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