Volatility Skew

Implied volatility decreases as the strike price increases, implying that implied volatility is different for in-the-money, out-of-the-money and at-the-money options. Volatility skew shows that implied volatility is higher as the options go more and more in-the-money, forming a right skewed curve. A volatility skew can also skew to the left, indicating higher implied volatilities for out-of-the-money options.