What is an expected move in options trading?

The expected move is the amount a stock is predicted to move after an earnings announcement, derived from the at-the-money straddle price. It represents the market's consensus forecast for the magnitude of the post-earnings price change.

What is implied volatility (IV) rank?

IV rank measures how the current implied volatility compares to its range over the past year. A high IV rank means options are relatively expensive, which is common before earnings announcements.

How do I use an earnings calendar for options trading?

An earnings calendar helps options traders identify upcoming earnings dates, expected moves, and implied volatility levels. Traders use this data to plan straddles, strangles, iron condors, and other earnings-related strategies.

What Is IV Crush? The #1 Earnings Trap Options Traders Fall Into

If you've ever bought an options contract before earnings and watched it lose value — even though the stock moved in your direction — you've experienced IV crush.

It's one of the most common mistakes new options traders make. Here's what's actually happening and why it matters.

What Is Implied Volatility?

Implied volatility (IV) is the market's forecast of how much a stock is likely to move. It's baked into every options contract's price.

When IV is high, options are expensive. When IV is low, options are cheap. Think of it like insurance pricing — the higher the perceived risk, the higher the premium.

Why Does IV Spike Before Earnings?

Earnings announcements are binary events — a company either beats, misses, or meets expectations. Because the outcome is uncertain, demand for options increases in the days leading up to the report.

This increased demand drives IV higher, inflating the price of both calls and puts. It's not uncommon to see implied volatility climb above 100%, 150%, and sometimes even above 200% on the most volatile names heading into earnings.

You can see this in real time on our earnings calendar — the IV column shows you the implied volatility for the earnings week expiration, so you can spot exactly which stocks have elevated premiums heading into their report.

So What Is IV Crush?

IV crush is the rapid decline in implied volatility immediately after earnings.

Once the uncertainty is resolved, the "risk premium" in options prices evaporates. IV drops sharply — often within minutes — and options prices fall with it.

Here's the key: even if the stock moves your way, the drop in IV can cost you more than the directional move earns you.

Quick Example

A stock trades at $100 before earnings:

Before: IV is 120%. A $100 call costs $5.00.
After: Stock moves to $102 (up 2%), but IV drops to 40%.
Result: That call might now be worth $3.50 — a $1.50 loss despite being right on direction.

The IV crush ate more value than the stock move added.

How Do You Spot It Coming?

The tools are all on the Options Earnings Calendar:

Implied Volatility — The IV for the earnings week expiration. The higher it is, the more room it has to fall post-earnings
Expected Move — Shows you how much move is already priced in
Earnings History — Check if a stock consistently moves less than expected (that's an IV crush pattern)

The Bottom Line

IV crush isn't random — it's predictable. It happens after every single earnings announcement. The question is whether you're positioned for it or against it.

Understanding IV crush is the first step. In our next post, we'll cover the specific strategies traders use to profit from IV crush rather than fall victim to it.

Until then, use the earnings calendar to study implied volatility and expected moves on upcoming reports. Start noticing the pattern — it'll change how you think about earnings trades.