How Does a Sudden Drop in IV Affect the Price of a Long Option Position?

A sudden drop in Implied Volatility (IV) negatively affects the price of a long option position due to the option's Vega exposure. Vega measures the sensitivity of the option price to a 1% change in IV.

Since a long option position has positive Vega, a decrease in IV will lead to a decrease in the option's time value, resulting in a lower overall option premium.