Options Jive

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Waiting for High IV

Options Jive

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

We like to look for periods of high Implied Volatility Rank in order to sell premium.

How often do these periods come up? And when they do, what should we be trading?

Looking at Market Measures “Scaling Deltas in High IV," we concluded that to optimize P/L, we sell close to the money strangles when IV is high, and farther out when IV is low.

A note of caution: we are going to see many more occurrences with 16 deltas since IV and IVR are usually low.

Do not get discouraged if you aren’t able to capitalize on high IVR opportunities since they are rare to begin with.

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