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Technical Indicators

Thu, Jun 5th, 2025
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The descriptions, formulas, and parameters shown below apply to both Interactive Charts and Snapshot Charts, unless noted. Please note that some of the parameters may be slightly different between the two versions of charts.
Studies noted with * are available only in Snapshot Charts and those noted with ^ are available only in Interactive Charts.
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Implied Volatility Percentile (IV Percentile)

Indicator Type: Standalone

Frequency: Daily Chart Only

Chart Type: Interactive Charts Only

Implied Volatility (IV) Percentile is the percentage of days with IV closing below the current IV value over the prior 1-year. A high IV Percentile means the current IV is at a higher level than for most of the past year. This would occur after a period of significant price movement, and a high IV Percentile can often predict a coming market reversal in price.

How to calculate IV Percentile

First you need the IV values over the past year, which is typically defined as 252 trading days.

Compare the current IV against the history to determine the number of days that the current IV value was greater when compared to each of the days within the history. The result, which is the IV percentile, is then expressed as a percentage.

IV Percentile = (number of day current IV was above historical values) / (total number of days within history) * 100

For example, if a stock's IV has ranged from 30-60% over the past year and is currently trading at 61%, its IV percentile would be 100%. Similarly, if the current IV was 29% then its IV percentile would be 0%.

The underlying implied volatility (IV) is calculated using the Binomial model and reflects the average implied volatility (IV) of the nearest monthly options contract that is 30-days out or more.

Generally, an IV percentile above 60% is preferred for selling options and an IV percentile below 40% is preferred for buying options, volatility is expected to eventually return to the mean. In essence buy low volatility and sell high volatility.

This indicator, when added to the underlying asset, fluctuates between 0 and 100%. We have the upper and lower bound set at 20 and 80, as well as a mid-line at 50.

Implied Volatility can be plotted as a standalone study, and is also used within the IV Rank study which compares the current level of IV to its historical range of values.

By default, this study is based on 1-year of data, but you may also select to view percentile over different time periods of 5-Day, 1-Month, 3-Month, 6-Month and YTD.

Implied Volatility Percentile

Default Parameters:

  • TimeFrame (1-Year): 5-Day, 1-Month, 3 Month, 6-Month, 1-Year, or YTD
  • Oversold (20)
  • Center (50)
  • Overbought (80)
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