We generally like to sell volatility at higher levels because it has a good chance of contracting, which would provide option sellers with sizable profits.
What is the tradeoff of selling premium whenis higher?Study
Sold 1 SD, SPY, 45 DTE, Since 2005
Segregated by IVR levels
Recorded average P/L, success rate,of Profit/Loss
We find that the tradeoff that comes with a high IVR and higher profits are more swings in your P/L and fewer. This does not mean you shouldn't trade high IVR, but rather recognize that when you do, you are taking on more risk to make more money per trade on average.