How Does High Implied Volatility Affect the Premium of Both Call and Put Options?

High implied volatility (IV) increases the option premium for both call and put options, assuming all other factors (strike price, time to expiration, underlying price) remain constant. This is because IV represents the market's expectation of larger future price movements.

Larger movements increase the probability that the underlying asset's price will move far enough to make both call options (higher price) and put options (lower price) profitable, thereby increasing the option's intrinsic value and its cost to the buyer.