What IV Rank to Look For Before Selling Premium

Why IV Rank, not IV%

Implied volatility in raw percent doesn't tell you if options are expensive — a 60% IV is cheap for a biotech and sky-high for a utility. IV Rank fixes that by asking: where does today's IV sit within this stock's own past year, 0 (yearly low) to 100 (yearly high)? That's the number premium sellers care about.

The practical thresholds

• IV Rank below 30 — options are cheap for this stock. Bad time to sell premium; if anything, this is when premium buyers (long calls/puts, debit spreads) get a better deal.
• IV Rank 30–50 — middling. Premium is okay but not compelling; be picky.
• IV Rank above 50 — the common floor experienced sellers use. Volatility is in the upper half of its range, so mean reversion is more likely to work for you.
• IV Rank above 70 — genuinely rich premium — but check why (see below).

A reasonable default: look for IV Rank ≥ 50 for credit strategies, and treat ≥ 70 as "rich, investigate the catalyst."

When high IV Rank is a trap

High IV Rank often means the market is pricing in a known event — earnings, an FDA decision, litigation. Sell premium into that and you're not collecting "expensive" options, you're collecting fairly priced insurance against a real move, and an IV crush after the event won't save you from a big gap. This is exactly why IV Rank alone is dangerous.

Combine IV Rank with risk

The fix is to pair IV Rank with a catalyst check. That's what our Edge Score does — Edge = IV Rank − Risk Score — so a stock only ranks well when premium is rich and there's no obvious landmine. High IV Rank + low risk score is the textbook setup; high IV Rank + high risk score is an earnings gamble in disguise.

Find them now

The highest IV Rank screener ranks the S&P 500 live, and the best-edge screener already does the risk pairing for you. Or scan any single ticker from the box above to see its IV Rank, IV% and risk in one view.