The Power of IV Rush: Capturing Volatility Before Earnings

Every earnings season, traders rush to predict outcomes — who will beat, who will miss, which stocks will gap higher or collapse overnight.

But some of the most consistent opportunities don’t depend on the results at all. They happen before earnings — in the quiet buildup of uncertainty that pushes option premiums higher.

That recurring phenomenon is what we call IV Rush.

And at EarningsWatcher, we’ve built a way to track, quantify, and trade it with precision.

What IV Rush Really Is

As earnings day approaches, demand for options rises. Traders hedge, speculate, or simply prepare for volatility.

This collective activity inflates implied volatility (IV) — the market’s forecast of future movement — and that inflation lifts the prices of both calls and puts.

The IV Rush strategy captures that final push upward:

• Enter before the release.
• Exit before the release.

By closing the trade before the actual announcement, you avoid the IV crush that follows once uncertainty disappears. The edge lies entirely in that brief window where volatility builds faster than time decay erodes premium.

How We Quantify the Rush

What sets this strategy apart isn’t the idea — it’s the data behind it.

The platform doesn’t try to “guess” whether volatility will rise on a single event. Instead, it measures how IV has behaved across dozens of past earnings cycles for each stock and turns that into a baseline.

At the core is our IV Rush model, built from aggregated historical volatility data for every major earnings name. Under the hood it’s essentially a smart way of turning past IV paths into a single, easy-to-read reference curve.

Past earnings aggregation

For each stock, we analyze years of earnings cycles and extract the at-the-money implied volatility curve — how IV evolved before, during, and after each release.

Statistical median curve

These individual IV traces are aggregated to form a median historical curve — a clean, data-driven reference for what’s “normal” around earnings.

On the chart, this appears as the black line — the historical median IV path.

Real-time overlay

We continuously track the current at-the-money IV — the live IV curve. By comparing live IV to its historical baseline, traders can instantly see whether the market is underpricing or overpricing the coming event.

When today’s IV sits below the historical curve, it often signals an opportunity: volatility hasn’t fully “rushed” yet.

Reading the IV Rush Signal

In practice, it looks like this:

On its last trading day before release, Visa is trading around $347, and the closest straddle costs $9.82 with an implied volatility of 45.6%.

Our IV Rush projection suggests that, based on past behaviour, IV typically rises into the low 60s right before the close — which would push the straddle’s value toward roughly $10.22.

That projection is displayed right on the IV Rush screen as a green positive forecast — indicating that expected IV expansion should outweigh the effect of theta decay.

In other words: statistically, this setup is favourable from now until the close.

This visualization — the live curve against the historic median — is what helps traders identify where the “rush” phase usually begins and when it’s most likely to peak.

The Timing Edge

Because the tool updates every 15 minutes, it’s easy to watch the live IV line begin to track upward along the historical curve.

That’s the signal.

For many stocks, this acceleration happens during the last two hours of trading before earnings — the final stretch where uncertainty reaches its highest point and option premiums inflate fastest.

It’s a brief window — but one that repeats almost every earnings cycle.

Straddles vs Strangles for IV Rush

Most traders play IV Rush with an at-the-money straddle, which keeps the position roughly delta-neutral and fully exposed to volatility changes.

More advanced traders sometimes use wide strangles — buying out-of-the-money options to amplify the effect of rising IV.

These can produce higher percentage gains when volatility surges, but they’re also more sensitive to time decay. Because IV Rush trades are short-term by design, that trade-off can still make sense — but only when timed precisely.

Why Historical IV Matters

Every stock has its own volatility “fingerprint.”

Some see steady IV climbs before every report; others show sharp last-minute bursts. Aggregating those past behaviours into a single median curve allows traders to see expectation patterns clearly — and trade with structure, not speculation.

This is the foundation of our IV Rush feature: it turns historical volatility into a live, actionable signal.

You can see in real time whether the current setup is aligned with past trends — and whether the expected IV expansion is strong enough to overcome decay.

The Essence of IV Rush

IV Rush isn’t about predicting earnings outcomes. It’s about understanding how the market prices anticipation.

Every quarter, the same pattern repeats: uncertainty builds, option prices inflate, and then — the instant results hit — volatility collapses.

The IV Rush tools capture that tension right before the break, giving traders a structured way to play the pre-earnings buildup with defined, limited risk.

It’s a rare edge in a crowded market — a moment where data and timing converge.