Volatility Smile

Higher IV at OTM strikes

What is Volatility Smile?

Volatility Smile The pattern where OTM puts and calls have higher IV than ATM options. Creates a smile shape when plotted. Reflects demand for tail risk protection.

Complete Definition

The pattern where OTM puts and calls have higher IV than ATM options. Creates a smile shape when plotted. Reflects demand for tail risk protection.

Related Terms

Skew Implied Volatility

Want to Learn More?

Explore our educational resources and analytics tools to deepen your understanding.

Learning Center

Volatility of Volatility (Vol-of-Vol) All Terms Volatility Surface

Learn Options Trading

Understanding Options Greeks Implied Volatility Guide How to Trade Options 0DTE Options Trading Options Glossary Strategy Guides Learning Center

Explore More Tools

Options Chain Real-time Greeks Greeks Heatmap Visual analysis Volatility Lab IV analysis Strategy Simulator Test strategies Vol Monitor 3D visualization Options Screener Find opportunities Historical Data Past snapshots Earnings Historical moves & IV 0DTE Analytics Same-day expiration