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Implied volatility represents the overall option prices on a particular stock. However, each option has its own unique price, and therefore its own implied volatility.
Volatility skew refers to the inequality of out-of-the-money call and out-of-the-money put implied volatilities.
In this video, you’ll learn:
1. What implied volatility skew is
2. Which products tend to have upside or downside volatility skew
3. Three helpful pieces of information volatility skew can tell us
You’ll also see some examples and visualizations to help you understand implied volatility skew.
==== FAVORITE OPTIONS TRADING BOOKS ====
How to Price & Trade Options:
Option Volatility and Pricing:
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