Volatility Risk Premium Gate

Setting key
vrp_gate_enabled
Default
ON

What it does

Requires that implied volatility actually exceeds recent realised volatility before any premium-selling engine enters. This is the edge a premium seller is being paid for: the market pricing more movement than has been happening. IV Rank alone cannot see it, because a high IV Rank can coexist with no premium at all if the underlying is genuinely moving that much. The directional engine is exempt, since it buys premium rather than selling it.

When to change it

Leave it on. Turning it off allows entries where implied and realised volatility have converged, which is exactly the condition under which selling premium stops paying.

Safe range

ON or OFF. ON is recommended.

Example

A symbol shows IV Rank 78, which looks attractive. But 30-day implied volatility is 44 and realised volatility is 47: the market is moving more than the options are pricing. The gate declines the entry. If the measurement is unavailable the check passes rather than blocking.

Financial Information Disclaimer

This site provides general information about ACondor, a software tool for automating options trading strategies. Nothing on this site is investment, tax, or financial advice. Options trading involves substantial risk of loss. Past behavior of any strategy does not guarantee future results. Consult a licensed financial professional before trading options. ACondor may earn a commission from affiliate links at no extra cost to you.