Volatility Skew
Definition
The difference in implied volatility across different strike prices, typically higher for out-of-the-money puts than calls.
Example
Post-crash markets often show “put skew” with elevated downside protection costs. Assignment Risk Category: Options Definition: The risk that an option seller will be assigned and forced to fulfill the contract obligation (buy/sell the underlying).
Frequently Asked Question
What is Volatility Skew in trading?
The difference in implied volatility across different strike prices, typically higher for out-of-the-money puts than calls.
APA Citation
Last updated:
· Source: VixShield Trading Glossary — From SPX Mastery by Russell Clark
⚠️ Not financial advice. This definition is educational content from the SPX Mastery book series by Russell Clark (VixShield). Past performance is not indicative of future results. Trading options involves substantial risk of loss and is not appropriate for all investors. Always paper trade before risking real capital.