Wall Street’s Earnings Volatility Playbook: Lessons for Crypto Traders
Earnings season represents the capital markets' most predictable volatility catalyst. While retail traders gamble on direction, institutional players treat these events as volatility arbitrage opportunities. The key lies in selling inflated premium before IV collapse—a tactic equally applicable to crypto's event-driven price swings.
Sophisticated traders employ defined-risk spreads like iron condors to exploit range-bound moves. They calculate expected moves using ATM straddle pricing, mirroring techniques crypto options traders apply around major listings or macroeconomic announcements.
The 'volatility crush' strategy—shorting Vega before high-impact events—finds parallel utility in crypto during exchange listings, protocol upgrades, or regulatory decisions. This approach capitalizes on the predictable premium decay post-event, whether in traditional equities or digital assets.
