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Earnings Options Quiz

By Dennis Bosmans · Updated June 2026 · 2 min read · Risk disclaimer

Earnings are the classic options trap: you can be right on direction and still lose. These six questions check that you know why.

Pick an answer for each question — your score appears at the end.

1. Question 1Implied volatility before an earnings report usually…

   RisesFallsDisappearsIs fixed

   Uncertainty builds into the report, so IV climbs beforehand.

2. Question 2After earnings are released, IV typically…

   Rises furtherDrops sharply (IV crush)Stays the sameGoes negative

   Once the news is out the uncertainty vanishes and IV collapses.

3. Question 3Buying options right before earnings is risky because…

   The market is closedIV crush can erase value even if you guess directionThere is no volumeOptions do not trade

   A right-direction call can still lose if the IV crush outweighs the move.

4. Question 4A strategy that profits from a big move in EITHER direction is a…

   Covered callLong straddleIron condorCash-secured put

   A long straddle buys a call and a put to profit from a large move either way.

5. Question 5Selling premium into earnings aims to profit from…

   A big moveThe post-earnings IV crushDividendsInterest

   Sellers want the inflated premium to deflate after the report.

6. Question 6The hardest unknown in an earnings trade is…

   The strikeThe size of the moveThe premiumThe expiration date

   The market prices in an expected move; the actual move is what you cannot know.

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss. Privacy Policy · Terms & Conditions.