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The sharp drop in implied volatility after a known event (typically earnings). Options lose value rapidly even if the stock barely moves.
⚡ KEY TAKEAWAY: Never sell premium into earnings unless you specifically want the crush. VolRadar's earnings gate blocks this risk.
Implied Volatility (IV)
Higher IV = more premium to collect when selling options. But also more risk if the stock moves.
Realized Volatility (RV)
When RV is lower than IV, options are overpriced relative to actual movement — the core edge for sellers.
IV Rank
IV Rank > 50 = premiums elevated, good for selling. Below 30 = cheap, consider waiting.
IV Percentile
IV Percentile 80 = IV was lower than today 80% of the time. High percentile confirms elevated premiums.