How Can an Option Trader Profit from a Mispriced Implied Volatility?

A trader can profit by using strategies that exploit the difference between the option's implied volatility (IV) and their own forecast of the asset's future realized volatility (RV). If IV is too high, the trader can sell volatility (e.g. selling a straddle).

If IV is too low, the trader can buy volatility (e.g. buying a straddle), betting that the market's forecast is wrong.