Options · Options specialist topics · lesson 5 of 9 · 6 min read · David Alexander
The volatility surface
the volatility surface
The two axes combined: implied volatility varies across strikes (the smile and skew) and across expiries (the term structure), and together they form the volatility surface - a two-dimensional map of implied volatility over strike and time. The surface is the complete picture of what the options market expects: the whole implied distribution across every strike and every expiry, and the object a professional options desk actually reads and trades.
This lesson is part of the advanced modules.
Modules 6 to 8 are included with a paid account. The definitional summary above is the whole of this page until then.