Volatility Skew refers to the difference in implied volatility of each opposite, equidistant option. The current volatility skew in the market results in puts trading richer than calls, because the IV in OTM puts is higher than the equivalent OTM calls. Velocity also attributes to the skew, since markets can fall much faster than they rise. Before the crash of 1987, this skew did not exist.
At tastytrade, we exploit this skew using strategies like the Jade Lizard. Jade Lizards take advantage of the volatility skew by selling rich naked puts, and increase our credit received by selling cheap call spreads. If the skew were ever reversed, we would use the Twisted Sister to take advantage of the opportunity.
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