PARTIAL · regime
Hypothesis
The sign and level of (IV − RV) signals whether to be net long or short volatility/gamma across the book.
Math
$$ \text{spread}_t = \sigma_{\text{IV}}(t) - \sigma_{\text{RV}}^{(n)}(t) $$
Method
Track DVOL-style IV vs realized vol; use as a regime tilt for vol-sensitive sleeves (not as a standalone options trade).
Results
| IV-RV mean-reverts | yes |
| As vol-regime context | useful |
| As standalone trade | execution-bound |
The IV-RV spread is a useful vol-regime context input (it mean-reverts and flags rich/cheap vol), but converting it to P&L needs an options-execution stack we treat as out of scope. Kept as context, parked as a trade.
Knowing vol is rich or cheap is half the trade; the other half is an execution venue for vol. Context is free, expression is not.