What is IV CRUSH?

IV CRUSH is a term used in options trading to describe a sudden decrease in implied volatility. This can occur when the market opens higher or lower than expected, or after a significant corporate event such as earnings. The result is a rapid decline in the extrinsic value of an options contract.

To avoid an IV crush, options traders should closely monitor market conditions and consider using strategies such as spreads or covered calls to reduce their exposure to sudden volatility changes. It's also important to have a clear understanding of the risks involved and to maintain a well-diversified portfolio.