Mike Butler Says IV Rank Can Lie to You, Here's What to Check

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. 📊 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 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 Two 70 dollar stocks, very different pay 09:17 Collecting enough to be worth it 10:30 The 50 to 100% sweet spot #tastylive #optionsinaction #ivrank #ivpercentile #impliedvolatility #premiumselling #ivcrush #optionsforbeginners #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.