[QUIZ] The Overlooked Earnings Setup: IV Crush

Complete the quiz below to test your understanding after our Part 1 Session.
Missed the session?
Watch the replay here: Part 1: The Overlooked Earnings Setup: IV Crush

Question 1:
Which of the following best describes Implied Volatility (IV)?
A. The stock's actual historical price movement over a past period
B. The market's expectation of how much the stock price may move in the future
C. The company's earnings growth rate over the past year
D. The interest rate set by the Federal Reserve

Question 2:
What typically happens to Implied Volatility (IV) before a company's earnings announcement?
A. IV decreases as investors wait for clarity
B. IV stays constant because uncertainty is already priced in
C. IV increases as uncertainty about results grows
D. IV disappears once the earnings date is announced

Question 3:
Why does IV usually drop sharply after an earnings announcement?
A. Because option contracts automatically expire after earnings
B. Because the company releases dividends
C. Because uncertainty is removed once results are known
D. Because trading volume decreases

Question 4:
How does an IV Crush generally affect option buyers and sellers?
A. IV Crush tends to favor both buyers and sellers
B. IV Crush tends to favor buyers and disadvantage sellers
C. IV Crush tends to disadvantage buyers and favor sellers
D. IV Crush does not affect either side

Question 5:
Which statement about Vega is true?
A. Long Vega positions benefit when IV increases
B. Short Vega positions benefit when IV increases
C. Long Vega positions benefit when IV decreases
D. Vega only matters for stock traders, not option traders

How did you do?

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Have questions about IV Crush or how to view Implied Volatility on moomoo?

Drop them in the discussion — our next session, Part 2: Hunting the IV Crush Play, will build on these concepts and show how to explore setups using moomoo's features.

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