Daily Volatility and Price Action

<p>A neat little trick that you can use with <a href="https://www.tastytrade.com/news-insights/volatility-trading-how-to-trade-during-volatile-markets">implied volatility</a> in the markets is known as the “rule of 16”. Essentially, you can take the IV of any stock, divide it by 16, and the result will give you a rough approximation of the <a href="https://ontt.tv/VtdeL">anticipated daily range</a> in the stock. With this calculation, you can quickly gauge just how big of a range a specific stock, or the market as a whole, is expecting for the upcoming trading day.</p>