Table of Contents
❓ Q1: How to Judge if IV Has Started Receding?
❓ Q2: How to Trade Once IV is Coming Down Post Event?
🧪 Step-by-Step Multi-Straddle Observation
🔼 Confirmation of Decay Game
💰 Example Trade: Cheapest Straddle
📊 Performance Snapshot
💡 Key Learnings from IV Drop
🧠 Recap of Straddle-IV Strategy
📢 Final Thoughts
❓ Q1: How to Judge if IV Has Started Receding / Coming Down?
Many times IV may come down briefly and then shoot up again, especially in high-IV environments. To judge whether IV is truly receding, we use the **Multi-Straddle chart**.
🧪 Step-by-Step Multi-Straddle Observation
1️⃣ Find a range (a mere guess is enough, e.g., 24,500–600–700).
2️⃣ Put up a Multi-Straddle chart of the chosen range.
– The first two candles (5-min time frame) are usually super green due to pre-event IV rise.
– From 9:25 am to 10:00 am, this formed a range.
– At exactly 10:02 am, this range broke down, signalling IV has started coming down **seriously**.
– Once the Multi-Straddle drops, we know the decay game has begun.
❓ Q2: How to Trade Once IV is Coming Down Post Event?
Once we confirm that IV is dropping, the strategy is simple:
👉 Look for the **cheapest straddle** available. At this time, it was the 24,600 straddle.
🔼 Confirmation of Decay Game
The Multi-Straddle is used by big money for premium eating. Once this comes down, we can be sure that post-event IV fall has begun, and premium decay accelerates.
💰 Example Trade: Cheapest Straddle
The 24,600 straddle quickly gave returns:
– From 10:00 am, it gave 18 points by 10:30 am.
– Overall, it delivered 34 points by 1 pm.
This shows the true power of IV coming down.
📊 Performance Snapshot
Metric Value
📈 IV Start Level 15.0
🚀 IV Peak (9:50 AM) 16.0
📉 IV Drop (1:00 PM) 13.0
🔻 IV Close of Day 12.0
This confirms the IV cycle: spike → drop → decay.
💡 Key Learnings from IV Drop
✅ Multi-Straddle helps identify IV reversal timing.
✅ Cheapest Straddle entry gave perfect timing-based returns.
✅ IV spike and fall can be leveraged to capture quick decay trades.
❌ Without confirmation, trading too early can be risky.
🧠 Recap of Straddle-IV Strategy
– Pre-event IV rise causes straddles to inflate.
– Multi-Straddle chart helps catch the exact moment IV begins to drop.
– Entering cheapest straddle post confirmation leads to high-probability trades.
📢 Final Thoughts
This strategy highlights the importance of timing in IV-based setups. By combining observation of Multi-Straddle with disciplined entry into the cheapest straddle, traders can consistently benefit from post-event IV drops.
💡 The game is not about predicting direction but **deciphering IV timing**.
