IV rank was developed in 2000 and has been improved since then to become a critical tool in determining trade decisions.

The fundamental reason for it working comes down to the philosophy of mean reversion in implied volatility.

As IV rank increases, there is a greater chance of IV mean-reverting and bringing profits to option sellers. When trades are placed in high IVR environments, we earn more than double the profits on average than when trades are placed in low IVR environments.