When markets swing wildly — like a big intraday range or a massive gap up — traders often react impulsively, chasing the next move or trying to catch breakouts. But data shows that after big trading days (where indices move sharply), the market typically shifts into consolidation with smaller daily ranges and falling volatility. This means directional bets, especially through options, can struggle in the days that follow.

According to Shubham Agarwal, the key to trading after a major market move is to stop chasing direction and instead focus on strategies that profit when the market stays in a tight range. One such approach is the Iron Fly, an options strategy where you sell both call and put at the near-the-money strike while buying protective out-of-the-money options on each side. This structure lets you collect premium when volatility drops and price ranges tighten — a common pattern after big moves.

Timing matters: wait for the market to settle into a defined range before entering, and aim for modest profit targets while using hedges to cap risk. In doing so, you trade the post-big-move calm rather than fight the market’s natural tendency to pause after chaos.