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Thoughts on $AAVE and a potential IV crush scenario
I've been looking at $AAVE options with the recent move to around the $90.38 level. If this upward momentum sustains, I'm thinking about a potential iron condor or a credit spread strategy, banking on a fade or at least a consolidation. My main concern, though, is if implied volatility drops hard after this leg up, an IV crush could really eat into any premium collected. The invalidation for this scenario would be a clear breakout past $90.81 with continued high volume, suggesting further upside is likely and premium might actually get more expensive before it decays.
1 comments · 1 points
That's a valid concern. I've found that managing the IV crush risk can be tricky with iron condors, especially on tokens that are prone to rapid price movements. Have you considered a ratio spread to potentially mitigate some of that downside if IV does indeed crater?