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If your options go nowhere even when the stock moves, you're probably trading the wrong kind of volatility.
Real Talk:
You spot a high IV play.
You buy calls. The stock moves your way.But your option barely moves.
Or worse — it loses value.Welcome to the soul-crushing world of IV crush.
But here’s the truth: high IV isn’t the enemy — your timing and strategy are. Let’s fix that.
⚠️ What Most Traders Get Wrong About High IV
Retail traders are told:
“High implied volatility = good premium = big move coming.”
So what do we do?
We scan for tickers with IV Rank above 70.
We buy calls or puts before earnings or a Fed meeting or some “big news.”
And then we get crushed when IV collapses right after the event.
Here’s the thing:
IV crush is not a bug. It’s the system doing exactly what it was designed to do.
If you’re long options in high IV without understanding where IV is in the lifecycle of the move, you’re trading blind.
🧠 First, Understand Why IV Crush Happens
Implied volatility = the market’s expectation of future price movement.
When events like earnings or CPI or FOMC are coming, IV ramps up.
But after the event?
That uncertainty vanishes. So does the inflated premium.
Even if the stock moves, the volatility you paid for evaporates — and your option tanks.
🔎 So How Do You Spot Real High IV Opportunities?
The secret isn’t just high IV — it’s high IV that’s still expanding, not peaking.
Here’s the framework:
✅ Step 1: Use IV Rank, But Don’t Rely On It Alone
IV Rank > 50 = Yes, there’s some juice
But ask:
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Is this IV climbing? Or already near peak?
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Is there a known catalyst? Or has it passed?
👉 Look at the IV percentile over the last 12 months — not just today’s number.
✅ Step 2: Look for IV Rising With Price Compression
This is gold.
You want to see:
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Stock consolidating in a tight range
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IV slowly rising over several sessions
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Volume building under the surface
Why it matters:
This means the market expects a move — but it hasn’t happened yet.
You’re front-running a breakout, not chasing post-event decay.
✅ Step 3: Avoid Buying Options Just Before a Known Catalyst
If you buy options the day before earnings, you’re late.
99% of that volatility is already priced in.
You’re not betting on movement — you’re buying inflated fear.
Unless the stock blows out expectations, you’ll lose on both sides.
Instead: Play earnings 2-3 weeks before the event, while IV is still rising — or play after the crush with credit spreads.
✅ Step 4: Use the Right Strategy for the Vol Environment
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🔺 High IV rising? Consider buying debit spreads (defined risk, cheaper premium)
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⚖️ IV at extreme highs? Sell credit spreads, straddles, or iron condors
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🧊 IV just crushed? Look to buy options when they're cheapest — not sell
Remember:
Your strategy should match the volatility cycle.
Not all “high IV” is created equal.
🔁 Real Setup Example: NFLX Pre-Earnings Compression
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NFLX consolidates sideways for 8 days
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IV Rank moves from 41 → 69
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No move yet. Earnings still 2 weeks away.
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You buy a debit call spread, risking $200 for $400 reward
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NFLX breaks out before earnings → IV keeps rising → you close at +80% profit
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No IV crush exposure.
That’s how you play the expansion, not the explosion.
🧨 Avoid These IV Traps Like the Plague
❌ Blindly buying weekly options before earnings
❌ Entering when IV is already peaking
❌ Buying ATM straddles with no plan to exit pre-event
❌ Mistaking daily IV spikes for a setup — without chart context
You don’t need high IV to win.
You need rising IV and the right structure.
🧘♂️ Final Thought: IV Is a Thermometer — Not a Guarantee
High IV doesn’t mean “big payday.”
It means the market expects something big. That’s all.
And expectation ≠ reality.
Trade the expectation arc, not the event.
Trade the compression, not the reaction.
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