Quick definition
The percentage of trading days over a lookback window (typically one year) where implied volatility was lower than the current reading. IV Percentile is a distribution-aware companion to IV Rank.
Percentile vs Rank
IV Rank can be pinned high or low by a single outlier day. IV Percentile is more stable because it counts every observation. A symbol that spiked once six months ago but has been calm since will show low IV Rank and moderate IV Percentile — a discrepancy that itself is useful information about the shape of the vol regime.
How premium sellers read it
Credit strategies typically want elevated readings on both IV Rank and IV Percentile. Elevated IV Percentile without elevated IV Rank often means "quietly rich" — no dramatic spike, but options have drifted expensive relative to their own recent distribution. That is a favorable setup for structures like iron condors and credit spreads.
How Treeova uses it
Treeova's IV pipeline maintains a rolling 30-sample minimum per symbol before publishing an IV Percentile, so the number never lies about its own confidence. Arch-AGI reads IV Percentile alongside IV Rank when scoring short-premium ideas — a setup that looks good on Rank but poor on Percentile gets down-weighted.