Part two of Mike Butler's implied volatility run on Options in Action, and it clears up a trap that catches a lot of premium sellers. IV rank and IV percentile both tell you where implied volatility sits relative to its own 52 week range, which is useful context, but a high IV rank does not mean there is actually much premium to sell. A product can read a 90 IV rank while its actual implied vol is only in the twenties, basically pennies for the risk.
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Chapters
00:00 Part two of the IV series
00:30 What IV rank actually measures
01:17 When rank goes above 100 or below zero
02:14 Adding IV percentile to your watch list
03:54 How IV percentile is different
04:22 Why it smooths out spikes
05:20 IVX is what really matters
07:19 The PayPal example
08:18...