Allows the user to identify option volatility skews in either a line graph or 3D view
Critical for traders who use option strategies such as Vertical Spreads and require volatility to be low on the long side and high on the selling side
Also useful when creating calendar spreads
Skew Chart Volatility Smile
The Option Skew tools general purpose is to provide the Option Trader a visual display of an options prices Implied Volatility so they can compare the values across the range of strike prices in a specific expiration period.
A Skew Smile indicates low volatility on the at the money (ATM) strikes and high volatility on the out of the money (OTM) strikes. This pattern is optimal for use in Bull Call Spreads.
You can display any expiration’s or have as many as eight different expiration’s at the same time.
You can also add or remove strikes, show calls, puts or both.
One of the very unique tool is the Matrix scanner. There are custom scans that will display a list of all stock symbols that have a Volatility Skew Smile for the front month.
Skew Chart Delta Comparison
You can compare Deltas of various months to assist in creating Delta Neutral strategies.
Easily change the Display Data setting to show either Volatility, Delta or Theta.
Skew 3D View
The Skew Chart can also be viewed in 3D which shows all available expiration months and the ability to plot selected amount strikes.
The 3D view makes it easy to see the smile pattern on the front month expiration contracts.
A transparent plane can be added at a user selected volatility level, this can help the trader quickly identify volatility levels across the expiration months above or below a certain level.
The 3D charts can be rotated in order to see the furthest out months at the front of the Chart.