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REDDIT

252 or 365 for de-annualizing IV?

G
Jun 26, 2026 · 00:33

I'd like to experiment with expected vs actualized moves, the problem is I don't know if I should use 252 or 365 to de-annualize IV? The formula I'm planning on using is IV \* sqrt(t/(252 or 365)), I'll be pulling the IV data from thinkorswim. I'm getting conflicting answers online if Black Scholes and its variants use 252 or 365 days for a year aka trading days or calendar days. DTE is usually by calendar days, but thinkorswim sorts their data by trading days. What should I do?

Edit: I'm seeing more sources referencing 252 rather than 365 (especially for equity options), so likely going to go with 252.