Guide · July 25, 2026

Volatility skew and IV term structure: the two cuts of the surface

Written and reviewed by ConvexValue · Updated July 25, 2026

Implied volatility is not one number per underlying — it varies across strikes and across expirations. Skew and term structure are the two cross-sections of that surface, and between them they answer “are these options expensive?” far better than a single figure can.

  • Skew holds an expiration fixed and moves across strikes.
  • Term structure holds strike position roughly fixed and moves out through time.

Measure skew on delta, not strike

The most important practical point in this guide. A fixed strike changes its relationship to spot every time the underlying moves, so a skew series built on fixed strikes mixes a change in pricing with a change in moneyness.

Delta is dimensionless and self-adjusting: the 25-delta put is always approximately the same relative distance out of the money, whatever spot does. So the professional convention is to quote skew between delta-referenced strikes — typically 25-delta put against 25-delta call, or 25-delta against 10-delta on the put wing to measure tail steepness.

That convention is also what makes two different underlyings comparable at all. Two names trading at different prices cannot be overlaid on a strike axis; on a delta axis they can.

Reading the put wing

In equities, downside implied volatility sits above upside almost always. The level of that asymmetry is unremarkable; changes in it are informative.

The useful series is the difference between two delta points, not either one alone:

  • Both lines rising together is a general increase in implied volatility.
  • The gap between 25-delta and 10-delta puts widening means the market is paying up specifically for far-downside protection — a different statement from volatility being generally higher.

Always check open interest and session volume alongside. A wing strike with almost no activity can move a skew reading on very little information.

Term structure, and what inversion means

Normally implied volatility rises with time to expiration: more time, more that can happen. Two departures from that are worth recognising:

  • A step at one expiration is an event being priced — most often earnings. The expiration covering the date carries materially more implied volatility than the one before it, and the size of the step is the market’s price for the event.
  • Inversion, where near-dated implied volatility exceeds longer-dated, means the market expects something imminent and expects it to resolve. It is the ordinary state immediately before a scheduled event and a stress signal when there is no event to point at.

Front-week skew and term structure are the fastest-moving part of the surface. With days to expiration, small moves in spot reprice the wings sharply, so a front-week shape has a short shelf life and should not be generalised into the name’s structural skew.

Level is not rank

A boundary worth stating plainly, because adjacent products blur it. Reading the current level and shape of implied volatility is one thing; expressing it as a percentile against its own history is another, and it needs a long, clean history of implied volatility to be meaningful.

cvforge’s historical options data is end-of-day aggregates, which supports studying how volatility levels have moved. It does not support a rank or percentile product, and a percentile computed from a short window is far weaker than the single confident number it appears to be. Read the series.

Fields you need

implied_volatility, delta, strike_price, expiration_date and contract_type, from the options snapshot on the free data tier.

Watch it built

More in the skew and term structure section, and see the 3D IV surface guide for both cuts at once.

This is research and education, not investment advice.