IV is the market's estimate of how volatile the underlying will be from now to expiry. The single most important non-direction column.
IV = Implied Volatility. Derived from the option's market price, it tells you the market's expectation of how volatile the underlying will be over the option's remaining life.
Higher IV = more expensive options. Lower IV = cheaper options. IV regime determines whether to buy or sell premium.
Reverse-engineered from the option's market price using Black-Scholes. Given the price, spot, strike, time, and risk-free rate, you solve for the volatility that makes the formula match the market price.
Strota's chain shows IV per strike, calculated from the LTP.
NIFTY ATM IV typically: 12-18% calm, 18-25% volatile, 30%+ around major events.
Compare today's IV to its 90-day percentile distribution. Bottom 20% = buying premium edge. Top 20% = selling premium edge.
BANK NIFTY IV runs ~30-50% higher than NIFTY at any given time.
Above 25% is high in modern Indian markets. Anything above 30% is event-driven (catalysts approaching) — IV typically crushes back to 14-18% within days of the event.
Single-stock realised volatility is higher than index (concentration risk). Stock IV typically runs 25-50% above index IV for most names.
Indirectly. IV is forward-looking market expectation. Actual realised volatility often diverges. The divergence is the trade — buy IV when it's cheaper than realised, sell when it's pricier.