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Market Intelligence › Basic Terminologies
Differentiation of IV of different strikes.
Published by The Retail Trader · JUL 31, 2026 · Derivatives (F&O)
IV Skew / Smile — Divergence of IV of different strikes. The IV of the put side is often higher than that of the call side, because the fear of downside sells at a higher price.
This term comes under Derivatives (F&O), in the section "Reading OPTION CHAIN". The option chain is not just a table of premiums — it tells the whole story of positioning:
Other terms in this group — understanding them together is more useful:
• Change in OI
• Highest OI Strike
• OI Concentration
• PCR (Put-Call Ratio)
• Max Pain
• Expected Move
• Far Strike Liquidity
• Theoretical vs Market Price
• Open Interest Buildup Table
To read the entire group and all its examples in one place, see the journal "DERIVATIVES: DICTIONARY OF FUTURES & OPTIONS" - this term has been taken from there.
This entry is for educational purposes only and is not a recommendation to buy or sell. Exchanges change charges, margins, lot sizes and expiry rules from time to time, so verify any figures with your broker or exchange.