IV, or Implied Volatility, is

IV, or Implied Volatility, is a critical parameter in option pricing models, representing the market's expectation of future volatility in the underlying asset.

Unlike historical price data, IV is inferred from option market prices. Therefore, IV reflects current market conditions and participants' expectations, providing valuable insights into market volatility.

High IV indicates a market expectation of significant future price fluctuations, implying higher risk and uncertainty, while low IV suggests a market expectation of smaller price fluctuations, indicating relative stability.

How to Profit from IV Crush in Earnings Season?

During earnings season, IV Crush refers to the sharp decline in implied volatility (IV) after a company's earnings report. Before earnings, IV rises due to uncertainty about the outcome, causing option prices to increase. After the earnings release, this uncertainty dissipates, leading to a rapid drop in IV. This decline impacts options prices, often causing them to decrease even if the stock price moves favorably. ----------------- How to take advantage of IV crush in earnings season? Share your experiences!

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