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vol bomb
What does vol bomb mean?
A sharp, sudden spike in implied volatility, often around a shock event, which rapidly repriced options.
"News hit and a vol bomb sent option premiums through the roof."
Origin
Options-trader slang for abrupt volatility spikes, used across Fintwit and WSB.
Frequently asked questions
What is a vol bomb?
A vol bomb is a sharp, sudden spike in implied volatility — often triggered by a shock event — that rapidly reprices options and sends premiums soaring.
What causes a vol bomb?
Unexpected news, surprise events, or sudden market fear can all detonate a vol bomb, jolting implied volatility upward in a hurry.
How does a vol bomb affect options?
Because implied volatility drives option prices, a vol bomb makes premiums much more expensive, which benefits existing option holders but hurts new buyers.
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