Over the past few days I have been looking into volatility and how it is factored into the price of an option. My understanding is that the higher the volatility, the higher the price of the option... and you don't want to buy an option that has a higher than average volatility because chances are the volatility will drop to the average, meaning your option will lose value regardless of price move.... is that correct?
Also, an already high volatility option is not leaving you with much room for a further increase in volatility, meaning that your option's volatility will most like drop rather than go up?
Are there any sites, links or software that provide figures on the implied volatility for Options as well as the historical volatility?
Thanks for all your answers and feedback up until now, it has really helped! Which is why I have a volatility scenario....