In Guided View, traders can see where any US stock sits across a 2-dimensional chart that conveys market expectations for (1) the stock’s volatility, and (2) the stock’s directional outlook, based on the options market. Customizable color coding makes it clear where your names resides on Compass Guided View.

Compass Guided View has been statistically measured with insights that can inform trading decisions. The results of back-testing with Compass can be found in our Compass Guided View Statistics article.

Volatility

The Compass Guided View uses IV Rank as a measurement of current volatility. IV Rank indicates where current implied volatility sits compared to the prior year’s values.

A high IV Rank indicates that volatility is relatively high and that options may be expensive for the stock, while a low IV Rank signifies that implied volatility is low compared to the prior year with relatively cheap options.

Directional Outlook

Compass applies Risk Reversal Rank to show you how to use calls and puts to best optimize your position. Risk Reversal indicates how expensive calls are relative to puts, measuring the difference in implied volatility for same expiration options.

Risk Reversal = [30dte 25 delta call IV] - [30dte 25 delta put IV]

The Risk Reversal Rank indicates where a stock's current Risk Reversal value resides compared to the prior year.

• When Risk Reversal Rank is high, that indicates calls are expensive relative to puts, and traders might consider selling call spreads or buying puts.

• If Risk Reversal Rank is low, that indicates puts are expensive relative to calls, and traders might consider selling put spreads or buying calls.

Example of Using Guided View

Look for the lower right quadrant reflecting low IV Rank and a high Risk Reversal Rank to find names with relatively low IV (indicating cheaper options) and relatively high call skew. In this type of environment, traders might consider buying puts.

SpotGamma Pro and SpotGamma Alpha subscribers can access Compass here.