IV Regime — How Implied Volatility Adjusts Projections
ACI classifies the implied volatility environment as LOW, MID, or HIGH and automatically adjusts income projections and risk scores for volatility strategies.
TL;DR
ACI classifies the implied volatility environment as LOW, MID, or HIGH and automatically adjusts income projections and risk scores for volatility strategies.
Why This Exists
A covered call strategy that yields 15% when implied volatility is high will yield 4% when IV collapses. Presenting the high-IV yield as expected return misleads the investment committee. ACI's IV Regime classification makes this adjustment automatic.
How It Works
BTC options 30-day ATM implied volatility classified by trailing 1-year percentile:
LOW: below 30th percentile — no adjustment
MID: 30th to 80th percentile — no adjustment
HIGH: above 80th percentile — score x 0.90
Example: Score 72 in MID regime. IV crosses into HIGH: 72 x 0.90 = 64.8 → 65.
What You See in the Platform
The volatility section shows a regime badge (LOW/MID/HIGH) with regime-adjusted score. The planner shows income projections under all three regimes.
Where to Go Next
Read Stress Testing for shock scenarios, or Convexity for return shape analysis.
Next up
Stress Testing Your Allocation
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