Just a quick reminder: IVP isn't about the absolute level of IV, but where it stands relative to its own historical range. Useful for determining if options are relatively cheap or expensive. Good for strategy selection.
I'd add that using IVP in conjunction with other metrics, like the VIX or term structure, can give an even clearer picture. Never just one indicator!
While true, a high IVP doesn't always mean a sure short. Context matters; news events can temporarily inflate IV without necessarily making options 'expensive' in the long run if the uncertainty is justified.
Spot on. Too many people confuse IV with IVP and end up making suboptimal decisions. This distinction is crucial for effective option selling or buying.
Agreed. It's a great sanity check before entering a trade. I always look for extreme IVP readings to gauge potential edge.
Fair point, but the 'long run' might be too long for many short-term option strategies. For those looking at weekly or monthly cycles, IVP is highly relevant.