A rising stock market almost always leads to a drop in implied volatility. A falling stock market leads to an increase in implied volatility. The spot VIX is inversely correlated with the S&P.
I mean just look at the spot VIX. It hit 38 at the peak of the crashing yesterday, and settled around 30 today. [1] 0.3 delta option premium on S&P 500 index futures (/ES) is up 50% from a few days ago.
up to a certain point it does. but not when the gains become too steep. Imagine if the S&P 500 was to go up 100% in a single day. now the range of potential price movement has been increased dramatically, so instead of the annual volatility parameter being around .15 or so for option pricing formulas, it is a much higher value, hence higher implied volatility.
I mean just look at the spot VIX. It hit 38 at the peak of the crashing yesterday, and settled around 30 today. [1] 0.3 delta option premium on S&P 500 index futures (/ES) is up 50% from a few days ago.
[1] https://www.investing.com/indices/volatility-s-p-500