Implied Volatility in Options: Why it is importance in Trading

Volatility in the stock market is a very common phenomenon traders face while buying stocks or trading in the future & options (F&O) market. And in the options market volatility plays a major role in changing the price of the option chain of underlying stocks or indices.

Trading options can be very risky compared to the cash market. The Nifty option chain gives wide options for traders to make a position in the contract of different strike prices and make extraordinary money during the expiry of that contract. The price of that option contract is highly influenced by the implied volatility that we are going to discuss today.