The primary determinant of put and call option premiums is implied volatility, or the price variance the market expects over a coming period. The VIX index is a compilation of the implied volatility of options on S&P 500 stocks. The VIX tends to move higher during bearish periods and lower when the diversified stock market index moves higher. A rising VIX reflects increased demand for price insurance to protect portfolios. During rallies, market participants tend to sell put and call options to enhance returns.
The VIX range over the past years- In 2023, the VIX trends lower
