Avoid IV Crush–This Simple Setup Helps Option Buyers Stay Alive!Hello Traders!
Have you ever bought a perfect options trade… only to see the price go nowhere despite the stock moving in your direction? That’s IV Crush — every option buyer’s worst enemy. But don’t worry — if you learn to read Implied Volatility (IV) and use event-based setups wisely , you can avoid this trap and stay profitable.
Let’s decode how you can protect yourself with one simple but powerful method.
What is IV Crush?
IV Crush happens after events: Like results, RBI policy, US Fed speech, or budget day — when uncertainty disappears, IV drops sharply .
Premiums deflate even if the move happens: This kills option buyers because the expected move is already priced in.
Mostly affects straddles, strangles, and directional trades placed right before the event.
The Simple Setup to Avoid It
Don’t buy options right before big events unless you expect a move bigger than the IV is pricing.
Buy options when IV is low + breakout is expected (triangle, flag, consolidation). Avoid high IV situations.
Use IV charts or tools to compare current IV vs. historical IV: If IV is abnormally high, expect a crush after the event.
Enter after the event is done if direction is clear — IV drops, premiums are cheaper, and the trend is real.
Rahul’s Tip
Trade clarity, not hype. Events bring emotion — but we trade structure. Wait, watch IV, and strike when the odds are with you.
Conclusion
IV Crush can wipe out good trades if you don’t respect volatility cycles. Learn to read IV, align it with price action and timing , and your option buying game will completely change.
Ever got trapped in an IV crush? Share your experience below – let’s grow smarter together!
