Glossary term
Skew (Volatility Skew)
The difference in implied volatility across strikes; equity puts are typically priced at higher IV than equidistant calls.
Skew, or volatility skew, is the difference in implied volatility across strike prices for the same expiration. In equity markets, downside puts typically carry higher implied volatility than equidistant upside calls, reflecting persistent demand for crash protection. This put-side premium is why selling puts can be structurally profitable and why risk-reversals carry a cost. See Greeks 101.