The "daily Call" From Option Alpha: Options Trading | Stock Options | Stock Trading | Trading Online

Hey everyone. This is Kirk here again at Option Alpha and welcome back to the daily call. On today’s daily call, we’re going to talk about the difference between implied volatility rank, IVR and implied volatility percentile, IVP or IV percentile I guess for short. There’s a big difference in the trading community and a lot of people have questions on this, so hopefully we can help answer a lot of those today and just talk about how we look at implied volatility here with these two different metrics. But the first thing you have to understand is why we use these in general. The reason that we use any type of implied volatility ranking or percentile metric is because if you just set an implied volatility level, it's totally arbitrary unless we know ranges and highs and lows. That’s really what it comes down to. If I told you that implied volatility on Apple was say 20% and implied volatility on Google is 20%, that's totally arbitrary. Yes, it’s the same number, but implied volatility on Apple at 20% could be l