Can the Price of Fear Predict Tomorrow's Volatility?

A quant study every premium seller should see. Using 20 years of data, the Market Movers desk asks whether the price of fear, IV rank, predicts where volatility goes next. The finding is mean reversion with a twist: the more fearful the tape, the harder vol tends to fall the next day. Price itself is almost useless for predicting tomorrow's vol. The real tell is volume, the one input that moves with IV rank, since the size of a move drives it. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 A 20-year study on fear and vol 00:30 IV versus IV rank, explained fast 01:20 Mapping fear to the price 02:10 What happens to IV after a spike 02:50 Why price can't predict next-day vol 03:40 The correlation breakdown 04:30 Volume is the real tell 05:20 Why volume and IV move together 06:10 The feedback loop in SPY and tech 06:50 What it means for premium sellers #tastylive #marketmovers #ivrank #impliedvolatility #premiumsellers #volume #meanreversion #optionseducation #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.