Hi everyone, I am having trouble understanding IV. I realize it is one component of the price, and that it's the component that often screws over n00bs who correctly predict the move of the stock but still lose money. For example, the BAC 20 Calls have an IV of 0.37. (http://www.crimsonmind.com/options/QuoteOptionsQM.aspx?qm_page=66039) I can see that, in the past 6 months, the IV has been much higher - as high as 2.0. So, I'm assuming that said drop in IV is part of the reason my BAC calls have lost a ton of value. My question is: how can I use IV to determine if an option is "cheap," and does the IV tell me what kind of move is "price into" the option? Also, what kinds of moves cause IV to go up or down? Based on some threads I've read, if a stock is rising, then pulls back, the IV on the call option will drop on the pull back, but might not rise again if the stock rebounds? Thanks, and happy new year to all!