How Does Volatility Impact the Moneyness of an Option over Time?

Volatility is a measure of how much the price of an asset fluctuates over time. Higher volatility means that the price of the asset is more likely to make large moves, both up and down.

This can have a significant impact on the moneyness of an option. An option that is out-of-the-money can become in-the-money if the price of the underlying asset moves in the right direction.

Conversely, an option that is in-the-money can become out-of-the-money if the price of the underlying asset moves against it.