The counterpart to the IV ramp is the IV crush: the moment a catalyst passes and its uncertainty resolves, the inflated implied volatility collapses, and option premiums drop sharply — sometimes enough to turn a correct directional call into a losing options trade. It's one of the most important and misunderstood dynamics in event trading (see also IV crush around events).
Why the crush happens
IV ramped up before the event because of uncertainty about the outcome. Once the event happens and the outcome is known, that uncertainty vanishes — there's no longer a big unknown to price — so implied volatility deflates back toward normal, often instantly. The premium you paid for the event's potential move disappears with the resolution, regardless of which way price went.
How it burns traders
The classic trap: you buy an option before an event, the underlying moves in your favor, but your option loses or barely gains because the IV crush offset your directional gain. You were right and still lost — because you paid inflated premium and the volatility component collapsed. The move has to exceed the expected move the market already priced in for the long option to win after the crush. This is why simply “buying a call before FOMC because I think it'll rip” is so often a loser.
Being right about direction isn't enough when you overpaid for volatility. The crush charges you for the uncertainty you bought — and refunds nothing when it resolves.
Avoiding the trap
Respect the crush in your event trading: buying rich pre-event premium is a bet that the move beats the priced-in expectation, not just that you have the direction right. For a 0DTE scalper, one implication is that trading the reaction after the event — once IV has crushed and premium is cheaper — can be cleaner than paying up beforehand. NoVo factors the volatility environment into execution; understanding the crush keeps you from the “I was right and still lost” trap that catches so many event traders.