How Does ‘Volatility’ (Vega) Influence an Option’s Premium?

Vega is the option 'Greek' that measures the sensitivity of an option's price to a 1% change in the underlying asset's volatility. Higher volatility means the underlying asset is more likely to experience large price swings, increasing the probability of the option expiring 'In-the-Money'.

Therefore, an increase in volatility always increases an option's premium, and a decrease in volatility lowers it.