What is a trade you called correctly, but still lost money due to IV premium/crush?
ELIF: If IV is high and he pays a lot for the call option, he can lose money if the underlying asset's price doesn't move enough to justify the high premium? Is that what everyone means by "IV bad. You lose even if beats"
IV is implied volatility. High volatility means the market is expecting a big move, so options cost more. IV is higher than usual each quarter when corporations report earnings. But, as soon as earnings are reported, IV is lowered to reflect that–the price of the stock will move, but the unknown factor of ER has been removed. This is called IV crush.
Hypothetical with numbers: The price of a $100 ATM call option is $8 the afternoon before earnings are reported, but then $2 the morning after; if the underlying stock price doesn't go up $6 you will still "lose"on that bet.
Look up two tickers with shares that are similarly priced, but with different IV and you'll start to understand. High IV REQUIRES a big move to be profitable.
e.g. TMUS (15% IV, sep20 $200 call = $3.6) VEEV (42% IV, sep20 $200 call = $9.2)
What is a trade you called correctly, but still lost money due to IV premium/crush?
byu/Far_Pen3186 inwallstreetbets
Posted by Far_Pen3186
33 Comments
Indian market prediction post budget was right the, IV crush left in me losses.
Nobody here knows what those are. We’re all noobs. We’ll learn when it happens to us.
I bought two bitcoins at $5K each and sold for $2.5K 🥴
If you called it correctly then you would have made money. If you lost then you didn’t call it correctly.
Not options but the fake natural gas ETFs BOIL and KOLD
The one for Karuna’s KarXT drug, but it was all shares and I didn’t lose money on the implied volatility.
Not sure if it’s on topic but had to share. Sold a covered call on CRWD. Stock never rose above the strike price yet, at 4:00 on the day of expiration, the option was worth more than what I sold it for. At 4:05, CRWD was added to the S&P 500, stock shot up after hours on a Friday night, and I got assigned.
I was in MSTR like 6-9 months early 🤦♂️
Puts on Chewy. It dropped 20%. My contract missed being ITM by $1. Lost it all.
I was right but oh so wrong
This is about to be me on NVDA 140c 8/30
Bought $48K of $140 call options on NVDA on 6/18. Market was closed 6/19. NVDA popped early 6/20 and I was up 100%. Didn’t sell any. Options were underwater by that afternoon with a huge swing, and they never regained value. Ended up selling them in various increments, lost about $25K instead of getting a $50K increase.
The last time i made a call (bought $103, sold cava for $109) it jumped to $124. All because i listened to some regard crying about iv crush going to hurt my profit.
From now on, i hold until i lose it all.
UVXY calls, long back Oct 2020, it went up $280k. I should have sold it, held thinking it may go further only to see it dropped $320k, sold for loss!
If you lost money, you didn’t call it correctly. If you bought way out of the money calls and it goes up only 5% you didn’t call it correctly
I lost money on nvda calls pre and post split
I bought so muchASTS at $2. Sold them after Verizon signed up
You know you all can sell the contracts before expiration, right?
Wheat futures in the early days of the Russia/Ukraine conflict.
So with this being said I should sell my NVDA $130 9/20 calls before earnings rather than rely on a big run up after? I was thinking of selling all but maybe one anyways on Wednesday before close anyways as they’re up just over 100% but I’m just looking multiple opinions.
Bought ULTA $500 puts on 3/14, they expired worthless on 3/28.
I bought calls for FTNT on 2/6 in anticipation of earnings. It was generally favorable and the price shot up after hours. I intended to sell near market open the next day, waited just a moment to see where the price might be, and the price was in free fall.
If you got IV crushed, you didn’t call timing correctly.
I was up $280k on AMD calls prior to earnings last year. Held until after earnings and they expired worthless. Taught me a lesson on greed. Not only did I not capture the $280k, I lost the initial $100k which was like a double-tap to the nutsack.
What does *not* change is the break even price. If you are playing an option where hitting the break even is a moon shot, you’re not going to make money.
I had 52 55$ TEM calls for 8/16. It was 70$ the following week
Didn’t get IV crushed but bought puts for June 2024 MCD earnings because I knew they would be bad. They triple missed and then it mooned. 
This is exactly why I plan on closing out my NVDA calls if it goes green before earnings.
Bought SOFI calls for their last earnings that were absolutely crushed, despite good earnings and better guidance. Same happened with HIMS.
Both were expensive lessons that taught me to stay away from stocks with high short interest.
MSFT , the last time they reported earnings. I bought calls close to the money and after they reported my call got ITM. Next day , I proceeded to close my position and sell the contract , only to realize that when the market opens , now the premium for my contract was less than what I paid for. The most ironic part was that my contract was ITM.
Ahh yes, that’s called the ol’ WSB special
If you got IV crushed and lost money then you didn’t call it correctly fam
Understanding IV is integral to making money with options. Any regard can throw a bet one way or the other, but options are more than just the movement of the underlying share price.
$wdfc on earnings…. Should of held but I sold when the options got crushed
It’s called a “loss”.