Why Is a Trader Who Sells Options Typically Interested in a Decrease in Implied Volatility?

A trader who sells options (a short option position) is typically interested in a decrease in implied volatility (IV) because it will cause the option's premium to fall, allowing the trader to buy it back at a lower price for a profit. Since the seller is short Vega, a decrease in IV directly benefits their position.

They profit from the market's expectation of price movement subsiding.

Why Are Out-of-the-Money Options Often Cheaper to Buy?
How Can a Seller Benefit from Volatility Contraction after Selling a Call?
How Does a Short Put Differ from a Long Call in Terms of Payoff?
Why Is the Maximum Loss for an OTM Option Seller Theoretically Unlimited?
How Does a Decrease in Vega Affect an Option Seller’s Position?
Why Is High Gamma Undesirable for a Portfolio Manager Who Wants a Stable Hedge?
How Does a Naked Put Option Expose a Trader to Risk?
What Is “Time Decay” (Theta) and How Does It Benefit the Call Seller?

Glossar