“IV crush” describes a drop in option-implied volatility after uncertainty resolves. It is not a separate fee and it does not guarantee that every option falls.
What changes after the event
Before earnings, option prices often reflect uncertainty about a possible gap. Once results are known, one major source of uncertainty disappears. If other inputs were unchanged, lower implied volatility would generally reduce the time value of both calls and puts. The stock move and volatility change occur together, so the final premium reflects both.
The relevant comparison is not whether the stock moved “a lot.” It is whether the realized move, timing and post-event volatility were favorable relative to what the entry premium implied.
Buyer and seller are not mirror-image guarantees
A long straddle can lose if the stock move is smaller than the premium and remaining value require. A short premium position can still lose severely if the gap overwhelms the collected credit. Defined-risk spreads cap some outcomes, but their prices can still react to volatility, time and skew in non-obvious ways.
Never interpret high implied volatility as proof that selling options has an edge. It may represent genuine event risk.
How to research an earnings trade
Record the announcement timing, planned exit, current stock price, complete leg quotes, implied volatilities, maximum loss and several gap scenarios. Compare a no-volatility-change case with lower and higher exit volatility. Label every event probability as unavailable unless it is supported by a properly tested historical model.