Note to self, IV crush is painful! · Invest & Retire Community

Note to self, IV crush is painful!

Implied Volatility (IV) crush is a significant risk in options trading, particularly around earnings announcements. It refers to the sharp decline in the extrinsic value of an option's premium due to a decrease in volatility after the anticipated event has passed. This can result in losses for traders holding options through the event, even if the underlying stock moves in the predicted direction. To mitigate the risks of IV crush, traders may consider strategies such as closing positions before earnings or diversifying their options' expiration dates.

We will close our AAPL 180C calendars and open ones for May 17/31. Let's see what happens to the premium tomorrow. IV is like 59% tomorrow it will been the 30%. That has a big factor on the options pricing!

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