Implied volatility (IV) is the option market’s forecast of how much a stock will move. But a single IV number — “PLTR IV is 50%” — tells you almost nothing on its own. The question that matters is relative: is 50% high or low for this stock?
IV Rank: the only IV number that means anything
IV Rank places today’s IV inside its own trailing 52-week range:
IV Rank = (current IV − 52w low) ÷ (52w high − 52w low) × 100
An IV Rank of 80 means IV is near the top of where it’s been all year — options are expensive, which favours selling premium. An IV Rank of 15 means options are cheap — which favours buying optionality. The absolute level (50%) is noise; the rank is signal.
Here’s the live picture for PLTR — ATM implied vol over the last year, with the 52-week range shaded. Where the gold line sits inside that band is the IV Rank:
IV vs HV: is the fear justified?
The second lens is the IV–HV spread — implied vol versus realised (HV).
- IV ≫ HV → the market is pricing more movement than the stock has actually delivered. Premium is rich; the “fear” may be overpriced.
- IV ≈ HV → options are fairly priced relative to recent behaviour.
- IV < HV → rare, but it flags options that look cheap versus how much the stock is actually moving.
The blue line above is 21-day realised vol. When gold sits well above blue, the option market is charging a premium over what the stock has been doing.
Putting it together
A clean, repeatable read takes three numbers:
- IV Rank — expensive (sell) or cheap (buy)?
- IV–HV spread — is the implied premium justified by realised movement?
- Regime — is HV expanding (risk rising) or contracting (calming)?
That’s exactly what the SharpeIQ scanner computes across hundreds of tickers — so you find the setups instead of eyeballing charts one at a time.