Final answer:
Iodide (I-) is a good leaving group due to its low basicity and stability with a negative charge, and it's also a good nucleophile as its large size and high polarizability enable it to freely form new bonds with electrophiles.
Step-by-step explanation:
The observation that iodide (I-) is both a good leaving group and a good nucleophile might seem counterintuitive, but it's correct due to its unique properties. As a leaving group, stability of the iodide ion is paramount. Iodide is less basic compared to other halides, rendering it more stable with a negative charge.
Let's take the reaction of methyl iodide (CH3-I) with a nucleophile in an S2 reaction as an example. Here, iodide is the best-leaving group due to its low basicity and high stability when it gains a negative charge. On the other hand, the large size and high polarizability of iodide also make it highly reactive towards positively charged or electron-deficient centers, qualifying it as a good nucleophile.