{"id":13791,"date":"2026-05-27T07:30:48","date_gmt":"2026-05-27T07:30:48","guid":{"rendered":"https:\/\/lemonn.co.in\/blog\/glossary\/volatility-skew\/"},"modified":"2026-05-27T07:30:48","modified_gmt":"2026-05-27T07:30:48","slug":"volatility-skew","status":"publish","type":"glossary","link":"https:\/\/lemonn.co.in\/blog\/glossary\/volatility-skew\/","title":{"rendered":"Volatility Skew: How Option Prices Differ by Strike"},"content":{"rendered":"

Volatility<\/a> Skew: A Practical Guide for Traders<\/h1>\n

Volatility skew is the pattern of implied volatility<\/a> across different option strikes. Instead of being equal at every strike, IV often forms a curve or slope. Reading the skew helps Indian traders understand market mood and find better option strategies.<\/p>\n

This guide explains what volatility skew is and how to use it.<\/p>\n

What Is Volatility Skew?<\/h2>\n

Volatility skew describes how implied volatility (IV) changes across strike price<\/a>s for options with the same expiry. In a perfectly flat world, IV would be the same at every strike. In reality, it usually is not.<\/p>\n

The shape of the skew often shows what the market expects about future moves.<\/p>\n

How Volatility Skew Looks<\/h2>\n

Common skew patterns include:<\/p>\n

    \n
  1. Downward skew: higher IV at lower strikes (more fear of falls)<\/li>\n
  2. Upward skew: higher IV at higher strikes (rare, often in commodities)<\/li>\n
  3. Volatility smile: high IV on both far ends, low in the middle<\/li>\n<\/ol>\n

    Each shape tells a different story.<\/p>\n

    Why Skew Matters<\/h2>\n

    Skew matters for three reasons:<\/p>\n

      \n
    1. It reflects market mood and fear<\/li>\n
    2. It guides strategy choice<\/li>\n
    3. It supports better risk planning<\/li>\n<\/ol>\n

      A clear skew view helps you trade with awareness.<\/p>\n

      Skew in Indian Markets<\/h2>\n

      Indian skews vary by:<\/p>\n