when is an option most volatile
Low Volatility... Option Volatility is a measure of risk/uncertainty. The more volatile a stock is, the higher the options premium will be. The difficulty of predicting the behavior of a volatile stock commands a higher price for the option because of the additional risk/reward it poses. High volatility: higher option premium. Low volatility: lower option premium. Option volatility is broken down into two components: 1  Historical Volatility: tells us how volatile something has been in the past.  Implied Volatility: is the market's view on how volatile things will be in the future.