For options traders, implied volatility (IV) often matters just as much as price direction. The problem? Tracking metrics like IV Rank, IV Percentile, and IV/historical volatility (HV) ratios can feel overwhelming.
That’s where Barchart’s Profit & Loss (P&L) charting feature comes in. In his recent video, Rick Orford shows how traders can quickly read volatility signals to determine if they’re stepping into the market at the right time.
The Volatility Tab: Your Shortcut
When you open a stock on Barchart – like Palantir (PLTR), as in Rick’s example – click into:
- Options Strategies → Long Call/Put
- Select an expiration date
- Click the P&L Chart button
From there, you’ll see five tabs:
- Profit & Loss
- Greeks
- Expected Move
- Volatility
- Trend
The Volatility tab is the game-changer. It gives you:
- IV Rank gauge (where current IV sits in its 52-week range)
- IV Percentile (how often IV has been lower)
- Short-term vs. long-term volatility averages
- An instant read on whether volatility is rising or falling
How to ID Rising vs. Falling Volatility & What It Means
Rising Volatility (IV Up):
- IV Rank/Percentile above average
- IV/HV ratio > 1.09
- 5-day IV > 20-day IV by 5%+
Best for: Long calls/puts, debit spreads, bullish or bearish momentum bets
Falling Volatility (IV Down):
- IV Rank/Percentile trending lower
- IV/HV ratio < 0.91
- 5-day IV < 20-day IV by 5%+
Best for: Covered calls, cash-secured puts, credit spreads, income trades
By matching your strategy to the volatility environment, you avoid the #1 mistake options traders make: paying too much for premium in the wrong setup.
The Takeaway
Volatility drives your edge in options. With Barchart’s P&L charts, you can spot rising or falling trends instantly.
The next time you consider a trade, ask: Is volatility working with me or against me?
Watch Rick Orford’s clip on volatility now →
- Stream the full video → Options Volatility Secrets
- Use Barchart’s Volatility Charts to view volatility studies
- Explore P&L Charts for Options on your favorite stocks
