Implied Volatility (IV)
The market's expectation of future price movement, derived from options prices. Higher IV = larger expected moves.
Explained Simply
Implied volatility is extracted from options prices using models like Black-Scholes. If a stock's IV is 30%, the market expects the stock to move roughly ±30% over the next year (or ±1.7% per day). IV is crucial for options traders because it directly affects option premiums — high IV means expensive options, low IV means cheap options. IV tends to spike before events like earnings and drop after (IV crush).
How Tradewink Uses Implied Volatility (IV)
Tradewink tracks IV rank (where current IV sits vs. its 1-year range) and IV percentile for every ticker. This powers our volatility play signals — we sell premium when IV is high (IV rank >60) and buy options when IV is cheap (IV rank <20). The AI also uses IV to size positions and set stops appropriately for the expected move.
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See Implied Volatility (IV) in action
Tradewink uses implied volatility (iv) as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.