[GUEST ACCESS MODE: Data is scrambled or limited to provide examples. Make requests using your API key to unlock full data. Check https://lunarcrush.ai/auth for authentication information.]  LEAPTRADER [@LEAPTRADER_](/creator/twitter/LEAPTRADER_) on x 16.5K followers Created: 2025-07-07 18:02:12 UTC Option Selling on a Gap Down Day with High Implied Volatility (IV): Today we saw this on $TSLA Gap Down: This occurs when a stock opens significantly lower than its previous close, often due to adverse news or market reactions. High IV: Indicates that the market anticipates significant price movement in the stock, either up or down, leading to higher option premiums. Key Points: Premium Collection: The advantage here is the high premiums you can collect due to elevated IV. This can be particularly beneficial if you expect the stock's volatility to decrease or if the stock stabilizes. Volatility Crush: After a high IV event, volatility often drops, potentially leading to a "volatility crush" where option prices decrease, benefiting sellers if the options expire worthless. Delta: Consider the delta of the options you're selling. On gap down days, options with lower deltas might be safer since they're less sensitive to immediate price movements. Position Sizing: Be cautious with how many options you sell. High IV can lead to substantial losses if the market moves against you more than expected. XXXXX engagements  **Related Topics** [$tsla](/topic/$tsla) [vix](/topic/vix) [tesla](/topic/tesla) [stocks consumer cyclical](/topic/stocks-consumer-cyclical) [stocks bitcoin treasuries](/topic/stocks-bitcoin-treasuries) [Post Link](https://x.com/LEAPTRADER_/status/1942283021933015328)
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LEAPTRADER @LEAPTRADER_ on x 16.5K followers
Created: 2025-07-07 18:02:12 UTC
Option Selling on a Gap Down Day with High Implied Volatility (IV):
Today we saw this on $TSLA
Gap Down: This occurs when a stock opens significantly lower than its previous close, often due to adverse news or market reactions.
High IV: Indicates that the market anticipates significant price movement in the stock, either up or down, leading to higher option premiums.
Key Points:
Premium Collection: The advantage here is the high premiums you can collect due to elevated IV. This can be particularly beneficial if you expect the stock's volatility to decrease or if the stock stabilizes.
Volatility Crush: After a high IV event, volatility often drops, potentially leading to a "volatility crush" where option prices decrease, benefiting sellers if the options expire worthless.
Delta: Consider the delta of the options you're selling. On gap down days, options with lower deltas might be safer since they're less sensitive to immediate price movements.
Position Sizing: Be cautious with how many options you sell. High IV can lead to substantial losses if the market moves against you more than expected.
XXXXX engagements
Related Topics $tsla vix tesla stocks consumer cyclical stocks bitcoin treasuries