What Is the Difference between a 'Volatility Smile' and a 'Volatility Smirk'? ▴ Learn

What Is the Difference between a ‘Volatility Smile’ and a ‘Volatility Smirk’?

A volatility smile is a symmetric curve where OTM calls and OTM puts have higher IV than ATM options. A volatility smirk is an asymmetric curve, typical in equity and crypto markets, where OTM puts have significantly higher IV than OTM calls, creating a downward slope on the strike axis.

What Is the Difference between a ‘Volatility Smile’ and a ‘Volatility Smirk’?

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