IV Crush
IV crush is the sharp, sudden drop in implied volatility right after a known event resolves — such as results, the Budget or RBI policy — which collapses option premiums and can cause long options to lose money even when the direction was right.
Quick Answer
IV crush is the sharp, sudden drop in implied volatility right after a known event resolves — such as results, the Budget or RBI policy — which collapses option premiums and can cause long options to lose money even when the direction was right.
IV crush is fundamentally a volatility phenomenon: option premiums are inflated by the implied volatility priced in ahead of a known event — results, the Union Budget, an RBI policy decision — and that inflated portion collapses the moment the event resolves and the uncertainty disappears. Because so much of a pre-event premium is volatility and time value, a long call or put can lose money even when the direction was right, as the drop in IV outweighs the favourable move. OptionsGyan teaches how this shows up on the option chain; the complete reference for IV crush — the vega mechanics, the event calendar and worked NIFTY examples — lives on VolatilityGyan, our dedicated volatility site.
Read the full IV crush guide on VolatilityGyan
IV Crush — the full guide
The vega maths, the Indian event calendar and worked NIFTY examples of implied-volatility collapse.
Volatility, end to end
Implied, historical and realised volatility, the skew, the surface and the term structure — one reference.
Related on OptionsGyan: reading the option chain, the options fundamentals and the Vega guide. Or jump straight to IV crush on VolatilityGyan →
Published 1 July 2026. Educational content only — not investment advice.