--- title: "Volatility smile or skew: what is the difference | RupeeCase" description: "A volatility smile is the curve of implied volatility across strikes for one expiry, and it is usually lowest near the money and higher at both ends." source_url: "https://www.rupeecase.com/learn/questions/volatility-smile-vs-skew" --- On this chain, puts below the index carried more implied volatility than calls at a similar distance Implied volatility by strike for the 30 Jun 2026 Nifty monthly, strikes with trades within a few percent of the future, at the close of 10 Jun 2026. Horizontal axis shows each strike against the future. Source: NSE end of day data, computed by RupeeCase. As of 10 Jun 2026. 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](https://www.sebi.gov.in/reports-and-statistics/research/aug-2026/study-profitability-of-individual-traders-in-the-equity-derivatives-segment-fy25-fy26-_103835.html) Volatility smile or skew: what is the difference?A volatility smile is the curve of implied volatility across strikes for one expiry, and it is usually lowest near the money and higher at both ends. A skew is the tilt of that curve, and on the 10 Jun 2026 Nifty chain the puts below the index carried more implied volatility than calls at a similar distance above it. LGo deeper ## Where Learn teaches this. [Go deeperVolatility: historical against implied7 min, Beginner](/learn/path-16/module-16-1-historical-vs-implied-volatility)[Go deeperSmile and skew: a first look at Nifty and stocks8 min, Intermediate](/learn/path-16/module-16-7-volatility-smile-and-skew)[Try itIV solverThe implied volatility behind a dated settlement price.](/learn/tools/iv-solver) SSources ## Go to the source. 3 sources, NSE the most cited The publisher of each source listed below. Source: Module undefined source list. 1. [NSE option chain page (this page reads dated end of day files only)](https://www.nseindia.com/option-chain) NSE 2. [NSE, equity derivatives contract specifications (expiry cycle, lot size and strike rules)](https://www.nseindia.com/static/products-services/equity-derivatives-contract-specifications) NSE 3. [SEBI investor education, Understanding derivatives](https://investor.sebi.gov.in/understanding_derivatives.html) SEBI ?Questions people ask ## Related questions. 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Scan the code, fillFill one short form, and join my WhatsApp group. Slides, sources, factsheets and the rebalance logs live there, and members join a daily Google Meet with me. New to RupeeCase? [Getting started](/getting-started) [See the terminal](/terminal) [Sign up for RupeeCase](https://invest.rupeecase.com/signup) [Join the WhatsApp group](https://forms.gle/C6HMtM1Z2GfeocQV7) [One form, one group](https://forms.gle/C6HMtM1Z2GfeocQV7)Scan with your phone camera Education only, not investment advice, a research report or a recommendation to buy, sell or hold any security. RupeeCase (QC Alpha Technologies Pvt Ltd) is not registered with SEBI as an investment adviser or research analyst. Contracts and prices shown are for illustration only, come from NSE end of day files at least 30 days old, and are not recommendatory. Derivatives trading carries a high risk of loss.