Implied vs Realized Volatility for Nifty

Implied vol (IV) is what the market prices; realized vol (RV) is what actually happened. When IV >> RV, options are expensive (sellers' edge). When IV << RV, options are cheap (buyers' edge). Feature iv_rv_spread = atm_iv - realized_20d. The model uses it to pick strategy: spread positive + mean-reversion signal = seller; spread negative + directional signal = buyer. This single ratio prevents buying expensive panic options and selling cheap complacent ones. It is the most neglected dial in retail options -- everyone watches price, nobody watches the vol spread that determines if the premium is fair.