Why would forward volatility increase going into earnings

[tooriginal]

I'm talking about the volatility after earnings week expiry. How could earnings itself cause this?

Example, MSFT:

How is volatility distributed around earnings for MSFT?

1 day realized vol (garman klass)

So realized vol happens all on earnings day (in this case). Why bid on forward vol then??

 

[Matt_ORATS]

MSFT reports in 13 days.

In addition to offering traditional close-to-close realized volatility computations, we offer a second way to view historical volatility. Our proprietary historical volatilities are calculated from intraday open-high-low-close stock price market information and produce more accurate daily volatilities than traditional methods like close-to-close. orHv1d

Forward Implied Volatility
The forward volatility is a measure of the implied volatility over a period in the future extracted from IV at the beginning of that period and the end of that period. ORATS calculates forwards using the neighboring constant maturity implied volatilities 20, 30, 60, 90 and 180 days and the 30 to 90 day period.

Related Data Point(s): fwd30_20, fwd60_30

# Flat Forward Implied Volatility
The flat forward volatility is a measure of the implied volatility over a period in the future using theoretical pricing relationships from IV at the beginning of that period and the end of that period. ORATS calculates flat forwards using the neighboring constant maturity implied volatilities 20, 30, 60, 90 and 180 days and the 30 to 90 day period, ie ffwd30_20

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