How Does High Implied Volatility Affect the Profitability of an Option Seller?

High implied volatility (IV) generally decreases the profitability and increases the risk for an option seller (writer). High IV inflates the option's premium, meaning the seller receives a larger upfront payment.

However, the high IV also reflects a market expectation of large price swings, increasing the probability that the option will move deep ITM and be exercised against the seller, leading to a loss that outweighs the premium received.