Market Measures

Monday – Friday | 9:00 – 9:20a CT

The Tie Between IV and ROC

Market Measures

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

Potential return on capital tends to be highly positively correlated with implied volatility. This makes intuitive sense because options act as a form of insurance, and higher amounts of uncertainty (IV) tends to increase the demand for insurance as well as the max potential return on capital (ROC).

Our research suggests that you can achieve about 1.5x the average ROC trading in higher IV environments compared to lower IV ones.

Tune in as Tom and Tony walk through this in depth!

Market Measures More installments

See All »

Latest tastytrade Videos As of February 27

Most Shared From the last 30 days