Very well explained Louis, as usual with your other videos as well. I would like to ask a related query / concept. How about something like IV Percentile use for IV as this has been somewhat confusing. I am aware that only one of them should be used & that they are reasonably similar but in one of the apps that I am using it is causing a bias. Could you throw some light please & oblige.
Thanks for the positive feedback. IV Percentile displays the percentage of days of the last year where implied volatility was lower than right now. For example, an IV Percentile of 20% would mean that 20% of the days of the last year, IV has been lower than it is right now. This implies that the current IV is relatively low. The difference between IV Percentile and IV Rank is that IV Rank tells you where the current IV level is compared to the one year IV range, whereas IV Percentile tells you how often IV has been lower during the past year. Both metrics can be used to gauge how high/low the IV of a security is. I hope this clarifies the confusion. Otherwise, definitely let me know.
Well done. This is a clear explanation of of IV & IV rank without any fluff. Plan to watch more of your videos.
Very well explained Louis, as usual with your other videos as well. I would like to ask a related query / concept. How about something like IV Percentile use for IV as this has been somewhat confusing. I am aware that only one of them should be used & that they are reasonably similar but in one of the apps that I am using it is causing a bias. Could you throw some light please & oblige.
Thanks for the positive feedback.
IV Percentile displays the percentage of days of the last year where implied volatility was lower than right now. For example, an IV Percentile of 20% would mean that 20% of the days of the last year, IV has been lower than it is right now. This implies that the current IV is relatively low. The difference between IV Percentile and IV Rank is that IV Rank tells you where the current IV level is compared to the one year IV range, whereas IV Percentile tells you how often IV has been lower during the past year. Both metrics can be used to gauge how high/low the IV of a security is.
I hope this clarifies the confusion. Otherwise, definitely let me know.