In Options Trading, How Does Implied Volatility Relate to the Risk of Slippage?

Implied volatility (IV) reflects the market's expectation of future price swings of the underlying asset. High IV often leads to wider bid-ask spreads for the options contract itself, as market makers demand a greater premium for taking on the increased risk.

Wider spreads directly increase the potential for slippage when executing an options trade, particularly for market orders. Rapid changes in IV can also cause swift price movements, further exacerbating slippage risk.