Option Premium And Volatility

This question practices two core drivers of option value, time to expiration and implied volatility. A candidate needs to understand how each factor affects an option’s attractiveness to the buyer, including the idea that more time gives the underlying asset more opportunity to move and higher volatility increases the chance of a meaningful price swing. Interviewers ask this because option pricing is a foundational concept in sales and trading, and they want to see whether the candidate understands the intuition behind the major inputs rather than just memorizing formulas.