# IV Smile

Implied volatility across strikes for one expiry, with calls, puts, a fitted curve and the 25-delta strikes.

**IV Smile** plots implied volatility across strikes for one expiry, as a
smooth **Fitted** curve or the **Raw** quotes. Dashed markers show spot and the
two 25-delta strikes, and a dotted line marks at-the-money IV. The header gives
the **25Δ risk reversal**: call IV minus put IV at the 25-delta strikes, in
volatility points. **Details** adds the 25-delta put and call IV, the
butterfly, and every expiry's at-the-money IV.

Marked **(Beta)** in the widget picker: it is newer, and some of the options
data behind it can lag the live market by several minutes.

## Practical application

![IV Smile widget, illustrative example: steep put skew on the same-day expiry](https://q-bitf.com/docs-img/iv-smile.png "Illustrative example data, not a real session. NQ same-day expiry: 25Δ risk reversal -5.82 points, 25Δ put IV 34.82% at 26,900, 25Δ call IV 28.99% at 27,225, at-the-money 31.50%.")

**Reading it.** On the same-day expiry the 25-delta put, at 26,900, is priced
at **34.82%** and the 25-delta call, at 27,225, at **28.99%**: a risk reversal
of **-5.82 points**. The curve falls steadily from left to right: about 55% at
26,100 down to about 23% at 27,600. The butterfly is only +0.40 points, so the
two wings are not both bid; the extra premium is on the downside.

**What it means.** Traders are paying up for protection below the market far
more than for upside. Combined with the inverted
[term structure](https://q-bitf.com/docs/widgets/iv-term-structure), the market is braced for a
drop around a near-term event.

**How to use it.**

- **A deeply negative risk reversal:** downside protection is expensive.
  Selling rallies into resistance tends to work better than buying dips
  aggressively.
- **Risk reversal moving back toward zero:** fear is easing; dips are more
  likely to be bought.
- **A positive risk reversal** (calls above puts) is rare in index futures;
  it signals a chase for upside.
- Pick another **expiry** in Details to see whether the skew is a same-day
  effect or runs across the curve.