I hold a long position in a call option on IBM stock.If the price of IBM goes down and its volatility goes up,then the value of my call option

Question

Quizplus · Accepted Answer

The value of a call option is influenced by both the underlying stock price and the volatility of the stock. A decrease in the stock price typically decreases the value of a call option. However, an increase in volatility can increase the value of the option, as options are more valuable when the underlying stock is more volatile. Therefore, the net effect on the option's value can vary, leading to an increase, decrease, or no change in value.

I Hold a Long Position in a Call Option on IBM