← AdvancedLesson 3 · 3:40
Why don't all strikes have the same volatility?
Summary
You can read a skew curve, where each strike carries its own implied volatility, and explain why far puts carry more. You can work out what that tilt does to the premium a far-put buyer pays and a far-put seller collects.
Key terms
- implied volatility
- The swing size an option's price assumes; an estimate, not a promise.
- skew
- The tilt of implied volatility across strikes, one volatility for each strike, usually rising toward the far puts.
- far put
- A put with a strike well below today's price, often bought as insurance against a fall.
Check yourself
Answer each question to see why the right answer is right.
1. What does the word skew mean in this lesson?
2. On the 2 Nov 2026 SPX chain, which option carried the highest implied volatility?
3. Which pair of reasons does the lesson give for far puts carrying more volatility?
4. On the example tilt, the XYZ 1 delta put costs $20 instead of $3. If you sell it, what is that extra premium?
5. On the same tilt, what happens to the price of the 50 delta put?
Finished the video and the quiz? .