Implied Volatility vs IV Percentile

The annualized standard deviation of price returns implied by the current market price of an option, derived by solving the Black-Scholes model backwards from observed market price; forward-looking measure of expected future volatility; distinct from historical volatility which measures past realized movement.

The percentage of trading days in the past year on which implied volatility was lower than its current level; more robust than IV Rank when the 52-week high was an extreme outlier; IV Percentile above 70 indicates elevated premium; below 30 indicates compressed premium.