Implied Volatility Crush: How to Profit from Pre-Earnings Vega Run-Up [2026]
Date Published
1. The Physics of Implied Volatility Crush
Binary Event Resolution and the Volatility Collapse
Implied Volatility is a market-clearing price reflecting uncertainty. Prior to earnings, market participants bid up option premiums to hedge risk. The moment earnings are reported, uncertainty vanishes, and IV collapses back to baseline historical volatility.
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