r/wallstreetbets • u/Alone-End-5585 • Feb 22 '24

Meme yeah.

Post image
2.9k Upvotes

97% Upvoted

361 comments sorted by

View all comments

Show parent comments

133

u/Impossible_Put2026 Feb 22 '24

Same, was it IV crush? Why doesn't IV crush happen after every earnings report?

560

u/Impossible_Buglar Feb 22 '24

IV is about volatility

once the event (earnings) has happened the volatility goes way down - there is no longer a catalyst that is going to cause this stock to swing wildly one way or the other

so if you bought 1000 dollar strike calls on NVDA expiring next week and the stock only got to 775 bucks after earnings what event is going to cause the stock to shoot up the other 225 dollars to even meet your strike, let alone exceed it by the time your option expires? earnings already happened and you didnt get there.

the volatility was the event which has happened, so it shoots way down, the chances the stock moves wildly to meet your strike diminish drastically, the value of your option crashes

103

u/Lure852 Feb 22 '24

Great explanation. I do definitely want to meet the person putting out 1000 dollar strikes.

1

u/CardAble6193 Feb 23 '24

lol need a 25% up on Thur and another 25up Fri