The basic rule is that volatility works in favour of the buyer but against the seller of the option. When you buy an option, the volatility works in your favour. But when you sell options the volatility actually works against you. This is more acute when it comes to the Nifty since the index tends to be more vulnerable to shifts in volatility. For example, if you have sold Nifty 10,000 call option at Rs.60 and if the volatility spikes up then the option value could spike up to Rs.70 even though the spot price of Nifty may not have changed. This results in a notional loss on your option selling position. In cases of spike in volatility you must ensure that strict stop losses are adhered to.