You bought one TSLA $420 call. The scale never moves, so you can watch the shape. Press play and watch implied volatility rise and fall on a loop. The blue today-curve breathes: it lifts and fattens as IV climbs, then sinks toward the grey expiration line as IV falls, all while the stock stays put.
The call's value as volatility rises and falls
Value today At expiration Strike $420
45%implied volatility
At-the-money option value $0 per share
Implied vol
45%
now, on the loop
Option value
$0
per share, at $420
Profit / loss
$0
per share
Entry premium
$0
paid at 45% IV
Plain English
Three things to know about volatility and P/L:
Higher IV lifts the whole curve. The option is worth more at every price, because bigger swings are being priced in.
It is about size, not direction. IV widens the range of outcomes; it does not say which way the stock goes.
Watch the crush. When IV falls back, the curve sinks even if the stock never moved, which is how a right-direction bet can still lose.
Taxes are not shown here. Options and the underlying stock are taxed differently, and it depends on your holding period and account type. None of this is tax advice.