Options Jive

Monday – Friday | 8:40 – 9:00a CT

Measuring Implied Volatility & Strategy Selection

Options Jive

Traders prefer to buy things when they are low and sell them when they are high. This is the premise for almost every market whether it is stocks, futures, or options. In the world of options, we are able to measure when option prices are high and low based on the implied volatility (IV) in the options. The main measure we look at relative to IV and options prices is IV Rank.

In today’s Options Jive, Tom and Tony show off the IV Rank calculation and how it works. After highlighting the importance of this measure, the guys apply high and low IV Rank to strategies in an attempt to clarify what high or low options prices mean to our most popular options strategies like the Iron Condor and the Vertical Spread.

Check out the segment above to see how IV Rank is calculated and used in options trading.

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