👀Ever predicted the move correctly and still lost money?
That was my first real lesson in volatility crush.
A trader buys a $BTC call before a major event. The price rises after the news, just as expected.
Yet the option drops.
What happened?
Before the event, traders expected a large move. That expectation pushed implied volatility higher and made the option expensive.
Once the news arrived, uncertainty disappeared. Implied volatility fell. Part of the option’s price vanished with it.
Direction was right.
Entry price was wrong.
Before buying an option around an event, ask:
Am I paying for a move that the market already expects?
A correct forecast cannot rescue an overpriced option!
August 1, 2026 287 1
