Earnings IV Crush Play — Pre-Earnings Short Straddle for Volatility Contraction
Sell ATM straddles 2-3 days pre-earnings, close post-earnings for IV crush profit. Only on mega-caps with IV rank >80%. 2% max per trade. Can use iron butterfly for defined risk.
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Earnings IV Crush Play — Pre-Earnings Short Straddle for Volatility Contraction
Sell ATM straddles 2-3 days before earnings when IV is elevated, then close immediately after earnings when IV crushes. Not betting on direction — purely profiting from the volatility contraction. Only on high-cap stocks ($50B+) where IV rank is above 80%. Risk management: never allocate more than 2% of portfolio per trade, use defined-risk iron butterfly if scared of tail risk.
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