Supply and Demand Dynamics in the Options Market and Price Volatility Patterns

Introduction

Options markets are a cornerstone of modern financial systems, serving as a mechanism for risk management, speculation, and hedging. These markets function on the principles of supply and demand, where the availability of options (i.e., the number of contracts) and the willingness of investors to buy or sell them determine price levels. The interplay between supply and demand in options markets is critical, as it directly influences volatility, liquidity, and overall market efficiency. This article explores the dynamics of supply