Decision workflow
IV crush trade checklist
Use this before placing an event-driven options trade. The goal is not to predict perfectly; it is to make the hidden assumptions visible.
- Event: what is the date, time, and information risk?
- Expected move: what move is priced by the relevant expiration?
- IV level: is IV unusually elevated for this underlying and expiration?
- Vega: how much premium changes for each IV point?
- Structure: long premium, spread, short premium, or no trade?
- Liquidity: bid/ask spread, volume, open interest, and realistic exit.
- Risk: maximum loss, gap scenario, assignment exposure, and position size.
- Exit: price target, loss limit, time stop, and post-event action.
Primary reading: OIC implied volatility overview · OIC Vega guide · OIC volatility and Greeks · FINRA options basics and Greeks · SEC Investor Bulletin on options