Why did my option lose value after earnings?
Before a company reports, option prices include a large expected swing (high implied volatility). Once the news is out, that swing is no longer ahead, so implied volatility usually falls back and takes part of the option's price with it. Unless the stock moved further than the prices assumed, a bought option can lose value even when the stock moved your way.
Try it: a call on a $50 stock, strike $50, 30 days left. The night before the report it is priced at 60% implied volatility; the morning after, at 30% (made-up levels). Move the stock overnight.
Simulated example, priced by the StrikePath engine (Black–Scholes, interest 4.3% a year). For learning; not advice.
Why implied volatility rises before, and falls after
A company's report can move its stock a lot in one night. Option prices before the report include that possible jump, so their implied volatility is high. After the report, the jump has happened (or not), and the options left only need to price ordinary days, so implied volatility usually drops. Traders call the drop the volatility crush.
The move the price assumed
The higher the implied volatility before the report, the bigger the move the price assumed. If the stock moves less than that, a bought option tends to lose; if it moves more in the option's direction, it tends to gain. StrikePath's free earnings check works this out for an option you type in.
What this shows, and what it doesn't
It shows the mechanism with made-up numbers. Real implied volatility before and after a report differs by company and by report, and by how far the option's expiry is from the report. Look at the same contract's quotes before and after to see what happened to yours.