Recipe · Volatility
Run the HV vs RV divergence recipe
A paid Cookbook that ranks names where vendor historical volatility disagrees with RV20 computed from 20 complete session log-returns × √252. Names with fewer than 20 valid returns are omitted, not padded. Vendor HV is never called RV20.
Official template: HV vs. RV Divergence Watch · Updated 2026-09-12
The job
Catch the trap of treating vendor HV as realized vol before you compare IV to “realized.”
What this recipe computes
- Vendor HV from SymbolMetaData.historical_volatility (window unspecified).
- RV20 = sample standard deviation of the last 20 valid ln(close/prior close) returns, annualized √252.
- Signed HV − RV20 in volatility points, ranked by absolute gap. IV30 is context only.
What it does not claim
- Vendor HV is not RV20. This recipe exists so those labels stay apart.
- It is not the Rank Symbols IV30 − RV20 comparison (forward IV vs trailing RV).
- A large gap is not a mispricing, VRP edge, or trade signal.
How to read it
Step 1
Run the divergence watch
Open HV vs. RV Divergence Watch in Cookbooks.
Step 2
Read the HV column as vendor, the RV20 column as governed
If a name is missing, it lacked 20 valid close/pre-close pairs. That is unavailable, not a zero realized vol.
Step 3
Use Rank for IV30 − RV20
Selling premium because “IV is rich to HV” is a different job. Rank Symbols holds the governed IV30 versus RV20 spread.
Frequently asked questions
- Is the HV column RV20?
- No. HV is the vendor historical_volatility field. RV20 is computed here from 20 complete session log-returns × √252. The two must not be substituted.
- Should I sell premium when HV is above RV20?
- This recipe does not say so. IV30 − RV20 on Rank is the implied-versus-realized comparison; even that is descriptive, not a published edge.
Related glossary
- IV RankIV Rank places today’s implied volatility between its recent high and low so “expensive” or “cheap” is relative to that underlying’s history.
- IV crushIV crush is a sharp drop in implied volatility after uncertainty resolves, often after earnings. Premium can fall even when the stock moves your way.
Related personas
- GEX and Options Flow for Volatility TradersVol traders live in regimes. GEX and IV set the weather; flow shows whether customers are paying for convexity or harvesting premium now.
- Options Flow for Options SellersSelling premium works until you short the strike the tape is attacking. Flow and walls help you see where demand is concentrated before you choose short strikes.
Related recipes
Open HV vs. RV Divergence Watch in TradingFlow
This public page describes the job. The recipe runs in the app and requires a subscription. It is not a free live report.