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The default view plots IV across strikes for NIFTY 50, offering 15-minute delayed data. Without logging in, you can use expiry and strike count controls while tracking Open Interest (OI), Change in OI, Put-Call Ratio (PCR), and Volume PCR.
The search bar lets you pull skew charts for other indices, F&O stocks, and commodities, all of which are accessible pre-login with the same delayed data. You only need to log in to access real-time tracking and execute trades.
The Volatility Skew chart shows NIFTY 50 with 15-minute delayed data as the default. On the x-axis are the strike prices; on the y-axis is IV in percentage terms. The ATM strike, closest to the current underlying price, is present in the middle of the curve.
In Indian index options, this curve typically slopes downward from left to right, indicating IV is higher at lower (OTM put) strikes and lower at higher (OTM call) strikes. This downward slope indicates structural demand for downside protection.
It's the standard shape seen in equity indices. Large institutional investors consistently buy puts to hedge their portfolios against market crashes, which is why OTM puts have higher IV than equidistant OTM calls. This ongoing demand leads to high premiums.
When both OTM puts and OTM calls have higher IV than the ATM strike, the curve is symmetric and U-shaped rather than having a flat slope and represents a volatility smile. It indicates that the market is pricing in a big move in either direction, commonly ahead of binary events, rather than favouring one side.
A steepening skew (where the left side rises sharply) means crash fear is rising, and traders are aggressively bidding up put prices. A flattening skew suggests easing market anxiety, as the demand for downside protection fades.
Skew helps you spot mispriced options. Strikes with abnormally high IV are relatively rich (candidates to sell), while those with lower IV are cheap (candidates to buy). Spreads capitalise on this exact discrepancy. By simultaneously buying the relatively cheap option and selling the relatively rich option, you reduce the net cost of the trade and improve your risk-to-reward ratio.
Volatility skew is the visual difference in implied volatility across various strike prices for the same underlying asset and expiry. Beginners often confuse it with the Volatility Smile or the IV Chart.
Skew refers to an asymmetrical, sloped curve (one side higher than the other), whereas a Smile is a symmetrical U-shape curve. Furthermore, while the IV Chart plots volatility across time, the Volatility Skew plots volatility across strikes.
Each strike's Implied Volatility is back-solved from that specific option's current market premium using an options pricing model. Those individual IV values are then plotted against their respective strike prices for the selected expiry.
The search bar is available pre-login, allowing you to load the skew chart for any index, F&O stock, or commodity, with the 15-minute delay applying across all instruments.
You can compare skew across expiries. Near-term expiries often exhibit steeper skew because they are generally more sensitive to near-term event risk, while far-dated expiries tend to show a flat slope.
The chart loads 10 strikes around the ATM by default. You can widen or narrow this range to focus on deep OTM options or focus on the immediate near-the-money action.
Logging in with your Options Trader account removes the 15-minute delay, thus allowing the skew chart to reflect real-time option prices during the live trading session.
Post-login, you can access all expiries, strikes, indices and F&O stocks.
Options Trader is built to provide a dedicated option trading platform for F&O traders. It offers:
Options trading carries substantial risk. A steep put skew means downside protection is expensive as the market is pricing in genuine downside risk. Selling rich OTM to harvest that elevated premium can look attractive, but it carries outsized tail risk. Thus, reading skew is about understanding what risk the market is pricing, not assuming a particular market direction.
A volatility skew forms an asymmetric IV curve where one side (usually puts) has higher IV than the other. In contrast, a volatility smile forms a symmetrical U-shaped curve where both OTM puts and OTM calls have elevated IV compared to the ATM strike.
