Implied Volatility
Explanation
IV is the volatility value that, when plugged into an options pricing model, returns the current market price of the option. Higher IV means the market expects larger price swings and options are more expensive. IV tends to increase before earnings and events (uncertainty) and decrease after (volatility crush). IV Rank and IV Percentile contextualize whether current IV is high or low relative to history.
Example
AAPL options show IV of 35% before earnings, compared to a typical IV of 20%. This elevated IV reflects uncertainty about the earnings outcome.