Market Measures

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IV Rank and Stock Movement

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.

We follow the market for stocks and the market for options on stocks every day that those markets trade. Stocks will move up or down on a daily basis, and the price for insurance on those stocks, or options, will move as a function of the stocks’ up or down trading.

We measure the movement in options prices via Implied Volatility using the Implied Volatility Rank metric. Today’s study gauges how stocks have tended to move in the past when our IV Rank metric has been high or low.

Tom and Tony put various metrics around this comparison, looking at:

Check out what the guys think of stock trading when Implied Volatility is signaling expensive options prices in the segment above.