Implied volatility (IV) directly determines the price of every option premium you collect. Higher IV means richer premiums — and richer premiums mean more income per trade, more buffer room, and a lower Adjusted Cost Basis for the same number of contracts.
The relationship is roughly linear: doubling IV doubles the at-the-money option premium, all else equal. A stock with 60% IV will generate double the premium of an identical stock with 30% IV at the same strike and expiration.
Beyond income, IV matters because of mean reversion. IV tends to spike during periods of fear or uncertainty and then revert to lower levels. Selling premium when IV is elevated (IVR above 50) means you are collecting premium at inflated prices — which will compress as IV normalizes, accelerating your profit even before expiration.
Ignoring IV and blindly selling options in low-IV environments is one of the most common mistakes wheel traders make. You accept the same stock risk but receive a fraction of the potential income.