Volatility structure
Volatility skew
By Prakash Dinde · Reviewed 30 August 2026 · General education
The basic idea
Volatility skew is the difference in implied volatility across option strikes or maturities. It can reflect demand for downside protection, event uncertainty or market positioning.
What it does not prove
Skew is descriptive. It can persist, reverse or widen. It does not by itself establish a profitable trade or a likely direction.
Research use
A structured review considers skew alongside liquidity, expiry, wider volatility context and event risk rather than treating one number as decisive.
Important risk note
This material is general education. Options can lose value quickly, and no concept or historical observation establishes an outcome for a future trade.