IV crush
A sharp drop in implied volatility after an expected event such as earnings. Option prices can fall even when the underlying moves the expected way.
Before a scheduled event, option buyers bid up implied volatility because the outcome is uncertain. Once the event is out, that uncertainty is resolved and IV tends to fall back toward its usual level, often by the next open.
The drop removes extrinsic value across the option chain, concentrated in the expirations that span the event. A buyer who paid elevated IV can lose money even when the stock moves in the expected direction, if the move is smaller than the one the options priced in.
Illustrative example (hypothetical numbers, not a real trade): the day before earnings, a $100 call expiring in four days costs $3.40 on a $100 stock, with IV at 80%. After the report the stock opens at $101.50 and IV falls to 35%. The call trades at about $2.25, a drop of $1.15 per share, or $115 per contract, even though the stock rose $1.50.