Options skew refers to the difference in implied volatility (IV) across various strike prices or expiration dates for options on the same underlying asset. It reflects the market's perception of risk and the demand for specific options, often indicating how traders anticipate potential price movements. Typically, skew arises because out-of-the-money (OTM) options—puts or calls—can exhibit higher or lower implied volatility than at-the-money (ATM) options, depending on market conditions and sentiment.
