Implied volatility is the yearly movement (in %) that makes an option's market price fit the Black-Scholes pricing formula. Higher IV means more expensive options.
A quick rule: the market expects a one-day move of about IV ÷ 19 percent (19 ≈ √365). With NIFTY IV at 13%, that is about 0.7% a day.
Why it matters
- Option buyers want IV to rise after they buy; a fall in IV can make an option lose value even when the price moves the right way.
- Option sellers prefer to sell when IV is high and likely to fall, for example before results or big events.
IV rank
IV rank (or IV percentile) shows where today's IV sits among past values: 80 means IV is higher than on 80% of recorded days. It helps judge whether options are cheap or expensive for that symbol.