Implied Volatility vs Vol Crush

The annualized standard deviation of price returns implied by the current market price of an option, derived by solving the Black-Scholes model backwards from observed market price; forward-looking measure of expected future volatility; distinct from historical volatility which measures past realized movement.

The rapid compression of implied volatility that frequently occurs immediately after a highly anticipated event resolves; causes bought options to lose vega value even when the price move was favorable; the primary reason option buyers around events often lose money despite being correct on direction.