Implied Volatility Filter: Find Rich-Premium Options
Use the IV filter to surface contracts with elevated implied volatility — the source of rich option premium. Beginner-friendly tutorial.
What implied volatility is
Implied volatility (IV) is the market's forecast of how much a stock will move, expressed as an annualized percentage. A 30% IV roughly means the market expects a one-standard-deviation move of ~30% over the next year.
The screener uses per-contract IV (the IV implied by that option's mid price). Higher IV → richer option premium → more income for sellers.
Where to find it
The Implied Volatility filter is in the sidebar of both screeners. The slider runs from 0% to 200%.
Recommended IV ranges
| Posture | IV range | Notes |
|---|---|---|
| Sleepy mega caps | 15% – 30% | Low premium, low risk |
| Standard wheel | 30% – 60% | Balanced — most large caps |
| High-premium hunting | 60% – 100% | Higher-IV mid caps |
| Earnings/biotech zone | 100%+ | Often binary risk |
The default is 0% – 200% so nothing is filtered. Move the lower handle to set your floor.
A worked example
You want to find puts paying enough to be worth the cash secured:
- Open the Put screener.
- Set IV to 70% – 200% (or just apply the High IV preset).
- Set Volume ≥ 100 to avoid garbage liquidity.
- Sort by Annualized Return descending.
You'll see meaningful-yield contracts only.
Why IV matters more than premium alone
A $2.00 premium on a low-IV stock is cheap relative to risk. A $2.00 premium on a high-IV stock is rich relative to risk. IV is the lens that lets you compare premium across very different underlyings.
Common mistakes
1. Confusing IV with realized volatility. IV is the forecast. Realized vol is what actually happened. They diverge — and that gap is where IV crush profits come from.
2. Treating IV in isolation. A 100% IV stock might have a known earnings event causing the spike. Always cross-check with the Exclude Earnings filter.
3. Ignoring IV rank vs IV level. A 50% IV is "high" for AAPL but "low" for GME. The IV Rank Calculator helps you see relative levels.
Where to go next
- Try the High IV preset — one-click setup.
- Read Vega filter for IV exposure control.
- Check the Earnings Safe preset for IV without binary risk.
Frequently Asked Questions
What is a high IV for the wheel strategy?
Most wheel traders consider IV above 40% 'elevated' and IV above 70% 'high'. Above 100% usually signals an upcoming binary event (earnings, FDA decision) and demands extra caution.
Should I sell options when IV is high?
Yes — when IV is high relative to its history, premium is rich and the IV crush after the catalyst tends to favor sellers. The Wheel Strategy 'High IV' preset automates this filter combo.