The IV Crush Is Only Half The Story: How Options Get So Expensive Before Earnings

Ask any options trader what happens to implied volatility around earnings and you will get the same answer: it collapses.

The “ IV crush ” — the sharp drop in implied volatility, and often option prices, when trading resumes after a report — is one of the most discussed phenomena in retail options trading.

But the crush is only half of the cycle.

Before implied volatility can collapse, it has to get up there in the first place.

That climb — sometimes called the IV rush — is the other half of the earnings-volatility cycle, and it follows a more consistent pattern than many traders realize.

What The Ramp Actually Looks Like As an earnings report approaches, the event remains inside the contract while ordinary trading time drains away.

Because IV is quoted as an annualized number, part of the climb is mechanical: roughly the same amount of event risk is being compressed into fewer remaining days, producing a higher quoted IV.

Demand for protection or exposure can steepen the path further.

That is why IV should be read alongside the option’s price and the time remaining on the contract.

Data compiled by EarningsWatcher shows that for Salesforce, Inc. (NYSE: CRM ), ATM implied volatility climbs roughly 90% over the final 5 trading days before a report — close to doubling from where it stood a week earlier.

And the ramp is heavily back-loaded: roughly two-thirds of the climb arrives in the final 2 sessions.

Salesforce (CRM): at-the-money implied volatility into past earnings reports.

Black = median historical path (right axis, percentage change from 5 sessions out); purple = the cycle into the Aug.

26, 2026 report, captured hours before the release.

Source: EarningsWatcher This is not one lucky quarter — the same climb shows up in every recent cycle: Salesforce’s 5-day pre-earnings IV climb, report by report: between +63% and +111% in each of the last 8 cycles.

Source: EarningsWatcher Not Every Stock Rushes The Same Intel Corporation (NASDAQ: INTC ) shows one of the steepest profiles in the dataset: a median climb of roughly 150% over the final week.

NVIDIA Corporation (NASDAQ: NVDA ), one of the most-traded options names in the market, ramps about 70% over the same window.

Same market, same 5 days — one stock’s volatility builds at twice the pace of the other’s.

The rush is a per-stock fingerprint, not a universal constant.

Intel vs.

NVIDIA: median path of at-the-money implied volatility into each stock’s past earnings reports (percentage change from 5 sessions out).

Source: EarningsWatcher The Math: IV Rush Vs.

Theta Decay An at-the-money straddle’s value is roughly proportional to implied volatility times the square root of time remaining — and before earnings those two forces pull in opposite directions.

Take a $10 ATM straddle with 5 trading days to expiry.

If 2 days pass and implied volatility stays flat, decay alone takes it to about $7.75 — down 22% with the stock going nowhere.

Run the same 2 days with IV climbing 40%, the kind of jump the back-loaded ramp routinely delivers, and the straddle sits near $10.85 instead — again holding the stock price constant.

In this simplified example, IV must rise roughly 29% merely to offset the loss of 2 trading days — so a 40% rise in IV translates into a gain of only about 8.5% in the straddle’s value, not 40%.

That tug-of-war is at the core of earnings-week options pricing: the practical question is whether the IV ramp is strong enough to offset the time disappearing from the contract.

The ramp is measured at the money, but the earnings premium affects much of the expiration’s volatility surface, so out-of-the-money strikes generally show rising IV as well.

That is why straddles and strangles feel it differently: a straddle carries the most direct exposure to the ramp at the highest cost, while a strangle costs less but requires a larger move before either leg gains intrinsic value.

Both structures are exposed to the same contest between rising IV and disappearing time, just in different proportions — and calendar spreads go a step further, splitting the two forces across different expirations.

For anyone trading earnings week, the practical upshot is that when you enter matters as much as what you buy.

The Caveats The cleanest historical estimates come from names with liquid options and a sufficiently long earnings history, and market-wide volatility shifts the baseline from quarter to quarter.

Historical medians describe typical behavior — they are not a prediction for any single report.

The Bottom Line The IV crush is the second act.

Before the report, implied volatility follows a measurable, repeating, stock-specific path — and as the math above shows, rising IV does not automatically mean a rising option price, nor does a high IV reading alone mean an option is mispriced.