Implied Volatility Doubt. Please help

I bought a NIFTY FEB 9000 CE for 15. 00 when the spot price was at 8550, now the spot price is around 8650+ and the value of the call option is 13. Can someone please explain me this? I didn’t completely understand the concept of Implied Volatility.

When volatility increases, option premiums becomes expensive (especially true in the backdrop of events which influence the markets). When the event is over, volatility cools off and therefore the option premiums.

I suspect you bought the 9000CE before the budget when the volatility was quite high…and as the volatility cooled off, so did the premiums.


Thank you for your reply Karthik , so in that case what would be the best time to buy the option if I knew in which direction the market would go? For example , had I known post budget the market would increase 150+ points, when should I have bought the 9000 option to profit maximum.