Weekly IV Cooling: What the Market's Telling Us

Over the past couple weeks, something notable is happening in the options market—1-week implied volatility has been sliding back down toward its recent lows. Check the vol heatmap and you'll spot the pattern: those warmer colors are gradually giving way to cooler tones.

Here's what makes this interesting: it's not some one-sided move happening only in calls or just on puts. The compression is showing up across the board—spanning every delta level, hitting both sides of the options book equally. That kind of broad-based cooling typically signals a shift in how traders are pricing uncertainty.

When IV compresses this uniformly, it usually means either traders are feeling less anxious about near-term moves, or we're in that phase where the market is catching its breath before the next twist. Either way, the weekly contract is now sitting near the lower end of its recent trading range.

For options traders watching the 1-week expirations, this is the kind of backdrop worth monitoring—especially if you're thinking about positioning around upcoming events or earnings.