Implied Volatility Rank (IVR)

One of my trading rules relies on Implied Volatility Rank, or IV Rank, as a metric used in choosing trades.

The rule says that when I choose a position, it must have an IVR of 25% or greater. This ensure that I’ll be entering higher-volatility trades, upon which my short iron condor trades rely in part.

The IV Rank is a metric developed by the team at TastyTrade, the education platform created by Tom Sosnoff, on whom I’ve relied greatly in drafting my own rules in their iterations over the years. What I most useful about his approach is that he backtests his assertions and makes the results of his testing public. He runs an open system, and I like that!

The TastyTrade blog today posted an explainer of IV Rank that I recommend to all who may be unfamiliar with the metric.

By Tim Bovee, Portland, Oregon, May 12, 2019


Tim Bovee, Private Trader tracks the analysis and trades of a private trader for his own accounts. Nothing in this blog constitutes a recommendation to buy or sell stocks, options or any other financial instrument. The only purpose of this blog is to provide education and entertainment.

No trader is ever 100 percent successful in his or her trades. Trading in the stock and option markets is risky and uncertain. Each trader must make trading decisions for his or her own account, and take responsibility for the consequences.

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