When we are searching for a new trade, we typically reference a single implied volatility, or IV, that is tied to the stock. This applies whether we are examining the raw IV of the stock or the implied volatility rank, or IVR, of the stock. However, when it comes time to select the appropriate strategy to exploit a given opportunity, we actually see that there exists a menu of different IVs across a given expiration chain.
This is clear evidence of the volatility skew that exists in the market, and in today’s segment, we talk through some potential ways to trade it.
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