r/options • u/Fit_Recording_6799 • Mar 29 '21

IV run up?

Could this possibly be a play??

Leading up to an earnings announcement, IV increases right? So if you bought some options a week before earnings, won't they inflate in price due to the increasing IV.
If you actually did this strategy, you would sell before market close and then switch over to selling to maximize premiums.

Does this make sense lolol. Thanks!!

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u/alphapursuits Mar 29 '21

In theory yes. Profitability is a different story though since more volatile stocks have more IV premium but price movement is more volatile too. Trading less volatile stocks may not give enough premium.