Should you buy or sell options before earnings?

It depends on IV rank. When IV rank is high, premium is expensive and the post-earnings IV crush favors premium sellers (iron condors, credit spreads, short strangles). When IV rank is low, premium is cheaper and long structures (straddles, debit spreads) have a better shot. Always compare the implied expected move to the stock's historical earnings moves first.

How much do options lose to IV crush after earnings?

Implied volatility typically collapses 30-60 percentage points within hours of a release. For a short-dated at-the-money option, that can cut the price roughly in half even if the stock does not move, which is why a long option can be directionally right and still lose money. Model it on the IV crush calculator before entering.

What is the expected move for earnings?

The expected move is the magnitude of the move the options market is pricing in, derived from the at-the-money straddle price for the expiration covering the event. Compare it to the stock's actual historical earnings moves: if the implied move is much larger than past moves, premium is rich; if smaller, a long bet may be underpriced.

How should you size an earnings trade?

Small. Earnings are binary events with gap risk, so cap risk at a small fraction of the account per position and define your maximum loss before the report. Defined-risk structures (spreads, condors, defined-risk flies) are preferable to undefined-risk trades into a binary event.

Earnings Trade Checklist: IV Crush, Expected Move & Position Rules

The complete pre-earnings checklist on one page: gauge IV rank and the expected move, decide buy vs sell premium, size the position, and set exit rules before the report.

6 min read · Updated 2026-06-12

Last Updated: June 12, 2026

6 min read

By: Ryan Silk & Lawrence Polatchek

Fact-checked & Up-to-date

Written by

ApexVol Research Team

Quantitative options research

All calculations use live ORATS institutional data — the same source used by professional volatility desks.

Technical reviewer

Ryan Silk, ApexVol Founder

Reviewed for technical accuracy

10+ years trading options. Built ApexVol's pricing engine, Greeks model, and IV-rank methodology.

This guide is updated as market conditions and ORATS data change. Last revised 2026-06-12. How we research →

Earnings Trade Checklist

A decision card for trading an earnings event with options: check IV rank and the implied volatility crush risk, compare the option-implied expected move to the stock's historical earnings moves, choose whether to buy or sell premium, size small, and define your exit before the report drops.

Print it, pin it, and never get caught by IV crush again.

Quick answer

Check IV rank first — high IV favors selling premium, low IV favors buying. Compare the expected move to historical earnings moves. Long options lose 30-60 points of IV overnight to the crush. Size small, define your exit before the report, and never bet more than you can lose on a binary event.

The Pre-Earnings Checklist

✅ Check IV rank. High IV rank → favor selling premium. Low IV rank → favor buying. Use the IV calculator.
✅ Get the expected move. Read it from the ATM straddle on the expected move calculator.
✅ Compare to history. Is the implied move bigger or smaller than the stock's past earnings moves?
✅ Model the IV crush. If you are buying, check how much the crush will cost — typically 30-60 IV points overnight.
✅ Pick the structure. Defined risk into a binary event. Spreads and condors over naked options.
✅ Size small & set the exit. Define max loss before the report. Never bet more than you can lose on a gap.

Buy vs Sell Premium

Condition	Lean	Structures
IV rank high, move overpriced	Sell premium	Iron condor, credit spread, short strangle
IV rank low, move underpriced	Buy premium	Long straddle, debit spread
Directional conviction	Defined-risk directional	Debit spread, broken wing butterfly
No edge	Skip it	Wait for a setup with an edge

The single most common mistake is buying a cheap-looking option into high IV and watching the crush erase it even though the stock moved your way.

The Golden Rule

Earnings are binary. The expected move tells you what is already priced in; your job is to take the side that is mispriced relative to history — or to pass. Size every earnings trade so a maximum-loss gap is survivable.

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