What is IV crush?
What Is IV Crush in Options?
Updated 2026-07-22
Quick answer
IV crush is a sharp drop in implied volatility after uncertainty resolves, often after earnings. Premium can fall even when the stock moves your way.
Also called: volatility crush, IV collapse, post-earnings IV crush.
Visual explainer
IV crush is the post-event drop in implied volatility. Premium can shrink even when direction looks right.
Full definition
Before known events, markets bake a large expected move into IV. After the print, that uncertainty premium often disappears. Long options can lose from crush; short premium can profit if the realized move is smaller than priced. Flow still matters: aggressive buying into high IV is a different story from quiet high-IV drift.
How it shows up in TradingFlow
- Option Trades
Watch whether expensive premium is still being bought into an event window (DTE + premium filters).
- Learn: Greeks & GEX
IV Rank/Percentile language used alongside regime context.
How to read it
- Frame whether IV Rank is elevated before the event.
- See if live flow is still lifting expensive OTM premium.
- Plan for crush risk separately from directional risk.
Who this is for
Earnings and event traders who buy or sell premium around catalysts.
Common mistakes
- Buying calls into earnings solely because “flow is bullish” without crush risk.
- Assuming crush always happens, sometimes IV stays elevated on follow-through news.
Frequently asked questions
- Does a big stock move prevent IV crush?
- Not always. A stock can gap and IV can still fall if the market had priced an even larger move. P&L is the mix of direction and volatility change.
Related terms
- IV RankIV Rank places today’s implied volatility between its recent high and low so “expensive” or “cheap” is relative to that underlying’s history.
- Unusual options activity (UOA)UOA flags contracts or underlyings trading far above recent norms in volume, size, or premium. It is an attention screen, not a directional signal.
- 0DTE (zero days to expiration)0DTE options expire the same trading day. Gamma and theta move fastest near the money on that clock.
- Option flowOption flow is the time-and-sales stream of options prints: contract, size, premium, and inferred aggressor side.
More guides
See the workflow in TradingFlow
Open the live Option Trades tape, rank unusual activity, and validate structure in one research path.