Where to find this Data in MenthorQ

Start from the Home Page of the Dashboard:

Swing Trade Volatility Edge - menthorq dashboard
Swing Trade Volatility Edge 8

Or use the Volatility Screeners:

Swing Trade Volatility Edge - Volatility screener
Swing Trade Volatility Edge 9

Understanding the Metrics

1. IV 30d (Implied Volatility – 30 Days)

This measures the market’s expected volatility over the next 30 calendar days. It’s derived from options pricing, typically ATM strikes, and reflects forward-looking sentiment.

2. RV 30d (Realized Volatility – 30 Days)

This is the actual volatility observed over the past 30 days based on daily returns. It’s a backward-looking metric showing how volatile the asset has actually been.

3. IV Rank

This shows how current implied volatility compares to its historical range. A 10% IV Rank means current IV is lower than 90% of historical readings over the past year, and vice versa.

Why These Matter for Swing Trades

  • When RV > IV, the market has been more volatile than expected. If this persists, long volatility trades may outperform.
  • When IV > RV, the market is expecting more volatility than it has shown. This is often a setup for selling volatility (e.g., credit spreads, calendars).
  • IV Rank tells you if IV is relatively cheap or expensive. You use this to determine which structure (debit or credit, long or short vol) is most appropriate.

High-Probability Swing Trade Setups

Setup 1: Long Straddle When RV > IV and IV Rank < 30

Scenario Example (SPX):

  • IV 30d = 13%
  • RV 30d = 16%
  • IV Rank = 18%

The market has been moving more than expected. This is a classic underpriced volatility setup.

Trade Structure:

Buy 1 ATM call and 1 ATM put with 20–30 DTE.

Rationale:

  • You pay a relatively cheap premium (IV Rank low).
  • You expect continued realized swings (RV remains high).
  • No need to predict direction — you profit if SPX moves big in either direction.

Enhancements:

  • Check MenthorQ Gamma Exposure (GEX): If gamma is low or neutral, movement is likely.
  • Use DEX (Dealer Exposure): If DEX is negative, risk of a squeeze adds tail risk upside.

Setup 2: Long Calendar Spread When IV Rank is Elevated, But Front IV > Back IV

Scenario Example (AAPL):

  • Front IV 30d = 32%
  • Back IV 45d = 26%
  • IV Rank = 72%
  • RV 30d = 18%

Implied vol is elevated, especially in short-term options. The market may be pricing in a near-term event (earnings, Fed announcement), but you expect volatility to mean revert after.

Trade Structure:

Sell 30d call, Buy 45d call, same strike.

Rationale:

  • You collect high theta from short IV.
  • You own longer vol cheap in case of post-event reversal or extension.
  • Ideal in sideways or mean-reverting environments.

Tool Combo:

  • Use Term Structure to confirm IV steepness.
  • Overlay Volatility Smile to avoid skew traps.
  • Check Risk Reversals — skewed upside/downside sentiment may alter spread logic.

Setup 3: Directional Long Call When IV Rank is Low and RV is Rising

Scenario Example (BTC Futures):

  • IV 30d = 45%
  • RV 30d = 47%
  • IV Rank = 22%

The crypto market has started moving more, but options are still priced with low IV.

Trade Structure:

Buy slightly OTM call with 21–28 DTE.

Rationale:

  • You’re buying directional exposure cheaply.
  • Low IV boosts your payoff if IV expands as price breaks out.
  • Works well before anticipated news, ETF flows, or macro cross-asset catalysts.

MenthorQ Tip:

  • Check Open Interest at your strike: Avoid thin liquidity.
  • Combine with DEX + GEX: If short gamma and negative DEX, directional bursts are more likely.

 When to Sell Volatility (IV > RV and IV Rank > 70)

Selling volatility works best when:

  • The market is pricing in more movement than reality.
  • Events are behind us, and implied vol remains stubbornly elevated.

Example Setup: Iron Condor or Strangle

Scenario (QQQ):

  • IV 30d = 28%
  • RV 30d = 14%
  • IV Rank = 88%

Sell wide OTM call and put. Structure your condor 1 SD out with 21 DTE.

Edge:

  • High IV inflates premium, giving you a larger range to profit.
  • Use Term Structure to ensure you’re not short vol into earnings or macro data.
  • Confirm Smile symmetry to avoid skewed premiums.

Integrating MenthorQ Tools

Term Structure:

  • Look for backwardation (short IV > long IV) for calendar spreads.
  • Confirm contango for straddle/strangle premium compression.

Volatility Smile:

  • Flat smile = balanced risk.
  • Sharp skew = opportunity in wings (strangles/straddles).

Risk Reversals:

  • High put skew = fear → good for long vol.
  • High call skew = euphoria → careful with short vol.

Net GEX & DEX:

  • High GEX = dealer dampening → stay away from long vol.
  • Low/Negative DEX = unstable flow → prime for vol expansion.

Final Thoughts

Swing trading with IV and RV is about knowing the difference between market expectation vs reality. The real edge lies in comparing those expectations (IV) with what’s happening on the ground (RV), then selecting the best maturity, direction, and structure based on the relative richness or cheapness of volatility.

By monitoring IV 30d, RV 30d, and IV Rank in conjunction with MenthorQ’s GEX, DEX, Term Structure, and Smile models, traders can deploy strategies that align with volatility cycles and flow dynamics — without the need to scalp every tick.