On this chain, puts below the index carried more implied volatility than calls at a similar distance
Take one expiry, the 30 Jun 2026 Nifty monthly, as it stood at the close on 10 Jun 2026. For each strike that traded, the settle price is inverted into an implied volatility, and the result is plotted against the strike. The chart is that curve.
A smile is the shape. Implied volatility is usually lowest near the money and rises as strikes move away in either direction. The two raised ends are why the curve is called a smile. The shape exists because option prices allow for larger moves than a single flat volatility would.
A skew is the tilt. For equity indices the put side is usually higher, because investors pay for downside protection. Compare a put and a call at the same distance from the index. On this chain the put was priced at a higher volatility: a modest tilt, not a steep one. The call side drifts lower rather than curling up, so what shows is mostly the tilt.
Two measures summarise it. Risk reversal is the call volatility minus the put volatility at a fixed delta. Butterfly measures how far the wings sit above the middle. Both need the same expiry and the same delta convention, so compare skew across dates only when the definition is the same.
Two cautions. A strike that barely traded gives a noisy volatility, so the chart keeps only strikes with trades. And a skew is a price, not a forecast: it shows what options cost, not which way the index will go.
Before you trade. Derivatives trading carries a high risk of loss. SEBI's study "Profitability of Individual Traders in the Equity Derivatives Segment (FY25 to FY26)" (August 2026) found that 87.7% of individual traders in equity F&O made net losses in FY26, with aggregate net losses of Rs 91,685 crore. Read the SEBI study