§ 01
AAPL — Current Price, Today's Change. Open AAPL on the Ledge to see current values.
§ 02
| Concept | Definition | Trading Implication |
|---|---|---|
| IV | Market’s expected annualized move | High IV = expensive options, low IV = cheap |
| IV Rank | Current IV vs. 52-week range | Above 50% = relatively high |
| IV Crush | IV collapse after an event (earnings) | Destroys value even if direction is right |
| Volatility Skew | IV differs by strike price | OTM puts often have higher IV (crash protection) |
§ 03
IV spikes before earnings and collapses afterward. Buying options into high IV is the #1 mistake retail traders make — even if the stock moves in your direction, IV crush can cause you to lose money.
§ 04
Expected Move = Stock Price × IV × √(Days/365)
§ 05
Calculate the expected move for a stock using its current IV. Does the option’s breakeven require a move larger than the expected move? If so, the odds are against you.
§ 06
A stock’s IV Rank is 90% (near 52-week highs). Should you buy or sell options?
§ 07
§ 08
AAPL IV is 25% on 30-day options. You believe future AAPL volatility will actually be 18%. What's the trade?
Five questions · AI feedback
Sit with the ideas.
A stock has IV of 60% one day before earnings. After earnings (stock moves 5%), IV drops to 30%. You owned a $100 straddle (call + put at the same strike). The stock moves from $100 to $105. Did you profit?
Why: