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Volatility skew refers to the pattern where options with different strike prices or expiration dates show different levels of implied volatility. In simpler terms, implied volatility is a measure of the expected price fluctuations of an asset, and traders use it to determine the price of options. Ideally, novice traders can assume options with the same underlying asset to have the same implied volatility, however, that is not always the case. Volatility skew happens when options with different strike prices (the price at which the option can be exercised) have different implied volatilities. This occurs due to market perceptions of risk, demand for particular options, or past market events, leading traders to price them differently. Traders might notice volatility skew in equity and index options like Nifty and Bank Nifty.

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Related Questions

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Concerns about trade have added to the volatility in the stock market.


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They can be, and are, "skew". If they are not lines, they cannot be "skew lines".


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There is no such thing as a skew plane - in isolation. It can only be skew with reference to something else.


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No. Skew lines do not intersect


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skew block plug


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your face is a skew orthomorphic


Are skew lines in the same plane?

No. Skew lines must be in different planes. Skew lines have no common points (they never cross).


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Skew lines are non-coplanar, which means they are in different planes. Skew lines are in different planes and they do not intersect.


What is true about a skew line?

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