Skew Tool gives you a visual analysis of the implied volatility of individual option contracts across the spectrum of an options chain.
- Implied Volatility - is a measure of what investors think about the future, or a representation of the market's best estimate of future volatility.
- Historical Volatility - is the actual value based on market data. For example, a 30-day historical volatility is a 30-day average of actual market volatility.
Next: 3 Things you Can Do With the Skew Tool