IV rank (implied volatility rank) is a measure that shows where the current implied volatility of an underlying sits between its lowest and highest levels over a look-back period, usually the past 52 weeks. It runs from 0 to 100 and is calculated as:
If implied volatility is 30 percent and its one-year range is 20 to 60 percent, IV rank is . Options traders use the figure because a raw level means little across assets: 30 percent is high for an index and low for a small technology share. A high rank suggests that every option premium is rich compared with the recent past, which favours strategies based on selling volatility such as the iron condor. One brief spike can distort the measure for a year by stretching the range. IV percentile, the share of days on which implied volatility was lower than today, is less sensitive to this. Skew rank applies the same idea to skew.