Fifty-one companies report earnings on May 21, 2026. That's the heaviest single day of the calendar week — and the full week runs at 34 to 51 companies daily. When you have that density of binary events packed into five sessions, the options market becomes a completely different animal. Let me walk through how I'm approaching it.
The VIX Context: Low IV, High Opportunity Cost
VIX is sitting at 18. That's "calm" by recent standards — far below the 25+ levels we saw during the VIX spike earlier this year. Low VIX means implied volatility is relatively cheap across the market. For options buyers, that's theoretically good news: you're paying less for the same contract.
But here's the nuance that gets people in trouble: individual stock implied volatility around earnings can be high even when the market VIX is low. VIX measures S&P 500 implied volatility, not single-stock IV. A stock with an IV rank of 80% heading into earnings is expensive regardless of what VIX is doing.
The spread between market VIX and individual stock IV around earnings events is where the real opportunities live this week.
IV Crush: The Tax You Pay for Being Right
Before getting into strategies, I need to address IV crush — because it's the biggest structural risk of earnings week. Here's what happens:
As earnings approach, options market makers inflate implied volatility to account for the binary outcome risk. A stock's IV might run from 40% to 80% in the week before earnings. The options look cheap in absolute terms but they're pricing in a big move.
Then earnings are released. Whether the company beats, misses, or meets expectations, the uncertainty is resolved. That binary risk premium evaporates. IV collapses back toward the baseline — often within minutes of the release.
The result: options lose 40-60% of their value post-earnings, even if the stock moves in the direction you expected. I've seen traders buy calls on a stock that subsequently rallied 5% — and lose money because the IV crush swamped the directional gain.
This is why "buy options before earnings" is not automatically a good strategy. The crush is your adversary.
The Names I'm Watching This Week
Nvidia (NVDA) is the centrepiece of this catalyst week. The AI infrastructure trade lives and dies by NVDA earnings. The setup: Nvidia has consistently beaten estimates by wide margins, but the stock has already priced significant beat expectations. IV on NVDA options is elevated. The question isn't whether they beat — it's whether they beat by enough to justify the move implied by options pricing.
Target reports after its weak guidance earlier this year. Consumer discretionary is already under pressure (XRT down 6% this week). A second miss from Target on guidance could accelerate sector rotation. Put spreads on TGT look interesting, but I'd be sizing small given the existing discretionary sell-off.
Palo Alto Networks is the cybersecurity bellwether. The AI-security intersection is a hot thesis, but Palo Alto has had mixed execution on margin. IV rank is elevated; this is a good candidate for premium-selling strategies.
Snowflake is the cloud data analytics play. High multiple, binary reaction to guidance. Not a name for premium selling — the tails are fat on this one.
My Playbook for the Week
Strategy 1: Straddles for High-Uncertainty Binary Events
A straddle is buying a call and a put at the same strike, same expiration. It profits if the stock moves significantly in either direction. The break-even is the total premium paid.
I use straddles only on names where:
- The move implied by the straddle is significantly below what I expect the actual move to be
- IV rank is below 50% (meaning options are cheap relative to history)
- The catalyst is genuinely uncertain (not a "beat and guide higher" setup)
At VIX 18, some names might screen well for this. But most of this week's key names have IV already elevated ahead of print — which means the straddle is expensive. Proceed with caution.
Strategy 2: Iron Condors for Rangebound Names
An iron condor is selling a put spread below the market and a call spread above it, collecting premium on the assumption the stock stays within a range.
This works in high-IV environments where you believe the implied move is larger than the actual move will be. When IV rank is above 70%, premium sellers have a structural edge over time.
For this week, I'm looking at iron condors on names with high IV rank, stable fundamental profiles, and a track record of tight post-earnings moves. The risk: iron condors have defined losses if the stock breaks out of the range — so sizing matters.
Strategy 3: Calendar Spread on NVDA
This is my highest-conviction options play for the week. Here's the structure:
- Sell a short-dated NVDA call (May 23 expiration — two days after earnings)
- Buy a longer-dated NVDA call (June 20 expiration)
- Same strike, near the current price
The thesis: the May 23 call will experience maximum IV crush after earnings. The June 20 call retains time value and benefits if NVDA continues to trend higher post-earnings. The net position profits if NVDA doesn't make an extreme move in either direction — and especially profits from the IV crush on the front leg.
The risk is a violent earnings move that blows through the strike, but sizing it at 2-3% of portfolio limits the damage.
Strategy 4: Sell Premium When IV Rank is Above 70
For any name with IVR > 70% this week, I'm looking to sell premium rather than buy it. The mechanics favor sellers in high-IV environments: you're collecting inflated premium and banking on the IV crush doing most of the work.
Execution matters here. Use credit spreads (not naked options) to define your maximum loss. Target premium received that's at least 30% of the width of the spread. And close the position at 50% of maximum profit — don't get greedy waiting for expiration.
What I'm Not Doing
I'm not buying naked calls or puts on any of the big names this week. The IV crush risk is too high for a low-VIX environment where that premium seems "cheap." It's not cheap — it's just priced in a different way.
I'm also not taking a directional bet on NVDA earnings. The stock could beat by 20% and rally 5%, or beat by 10% and sell off on guidance. Directional options around Nvidia this week is a coin flip with bad odds.
The Bigger Picture
Fifty-one earnings in a single day isn't normal market conditions. It's a stress test for portfolio positioning. The week creates both opportunity and danger in equal measure.
The opportunity: elevated IV across single names creates a premium-selling environment. The danger: a wrong-direction position in a high-IV stock can create losses that dwarf what a normal week could produce.
My approach is to stay small, sell premium on high-IV-rank names, and let the NVDA calendar spread do its work. The week will clarify a lot about where Q2 2026 earnings momentum is heading.
— Ruslan Averin, averin.com