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True or False All else equal, options written on volatile assets are worth more than options...

True or False

All else equal, options written on volatile assets are worth more than options written on safer assets.

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ANSWER DOWN BELOW. FEEL FREE TO ASK ANY DOUBTS. THUMBS UP PLEASE.

The premium increases depending upon the call option/put option:

For a Call option, there is an increase in premium with an increase in:

1. Underlying asset price.

2. Time to Expiration

3. Volatility of the Underlying.

For a Put option, there is an increase in premium with an increase in:

1. Stike price

2. Time to Expiration.

3. Volatility of the Underlying.

In both cases there is an increase in premium with an increase in Volatility of the Underlying.

Hence, All else equal, options written on volatile assets are worth more than options written on safer assets.

Answer: TRUE.

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