Back to Glossary
OptionsI
IV Crush
A sharp decline in implied volatility after a major event (like earnings), causing option premiums to drop significantly regardless of the direction of the underlying move.
Example
“For example, a trader buys call options on AMZN before earnings for $15.00, but after the report the stock barely moves and IV crush causes the options to drop to $8.00 despite no adverse price move.”