IV Surface
The IV Surface tab provides implied volatility analysis — helping you understand whether options are “cheap” or “expensive” and which expirations offer the best opportunities.
What is Implied Volatility?
Implied Volatility (IV) is the market’s estimate of how much a stock might move in the future. It’s baked into option prices:
- High IV = options are expensive = more premium to collect = good for sellers
- Low IV = options are cheap = less premium available = not ideal for selling
What the Tab Shows
Symbol Selection
Type any symbol (or pick from the default SPY) and hit refresh to load data.
IV Term Structure Chart
A chart showing implied volatility across different expiration dates. This tells you:
- Upward-sloping curve — Longer-dated options have higher IV (normal for calm markets)
- Inverted curve — Near-term IV is higher than long-term (usually means fear/uncertainty)
- Hump-shaped — A specific expiration has elevated IV (often around earnings or events)
Smart DTE Recommendation
The bot analyzes the IV surface and suggests the optimal DTE for trading. This recommendation considers:
- Where IV is richest relative to realized volatility
- Term structure shape
- Historical patterns
You’ll see a recommendation like: “Optimal DTE: 7 days — IV is elevated in weekly expirations.”
Skew Analysis
Shows how IV differs between different strike prices at the same expiration. Useful for understanding:
- Put skew — Puts are more expensive than calls (normal for indices — people buy puts for protection)
- Call skew — Calls are relatively expensive (unusual, might indicate strong bullish sentiment)
Why Does This Matter?
Understanding the IV Surface helps you:
- Choose the best expiration — Sell premium where IV is richest
- Time your entries — High IV environments are better for credit strategies
- Avoid traps — Abnormally high IV at a specific date might mean an earnings event you didn’t know about
- Compare strategies — Is a 0DTE or a 7DTE better right now? The IV Surface tells you.
💡 Tip: If the IV Surface shows inverted term structure (short-term IV higher than long-term), 0DTE strategies tend to collect more premium than usual. If the curve is flat and low, it might be a day to sit on your hands.
What to Look For
- IV Rank — How current IV compares to the past year. Above 30% is generally favorable for selling.
- Sharp kinks — An expiration with much higher IV than neighbors likely has a catalyst (earnings, Fed announcement).
- Flat and low — If everything is low-IV, premiums will be thin. Consider tightening strategy filters or waiting.