Log in Open account
United Kingdom
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider.
Show more
CFDs and forex (FX) are complex instruments and come with a high risk of losing money rapidly due to leverage. 64% of retail investor accounts lose money when trading CFDs with this provider. You should consider whether you understand how CFDs, FX, or any of our other products work and whether you can afford to take the high risk of losing your money. Losses can exceed deposits on some products.
Show less

Glossary

Volatility Smile Chart

Definition

The Volatility smile chart refers to the shape of the graph. The ‘smile’ shape results from plotting the strike price, which is the fixed price at which the owner can buy or sell the option, with the implied volatility of a group of options with the same underlying asset and expiration date. 

Implied volatility rises when the underlying asset of an option is further out-of-the-money (OTM) or in-the-money (ITM) compared to at-the-money (ATM).

You can select up to 5 expiries to compare the deformation of the smiles across those expiries. The volatility smiles show that ITM and OTM options tend to be more in demand than ATM. Implied volatility is impacted as demand drives prices.

Related Items

3D Volatility Chart In the money (ITM) Out of the money Probability Envelope Chart
See all glossary items -->

Put this into Practice

    Saxo
    40 Bank Street, 26th floor
    E14 5DA
    London
    United Kingdom

    Contact Saxo

    Select region

    United Kingdom
    United Kingdom
    Products & pricing
    Platforms
    Accounts & service
    General
    Other
    Legal

    Trade Responsibly
    All trading carries risk. To help you understand the risks involved we have put together a series of Key Information Documents (KIDs) highlighting the risks and rewards related to each product. Read more
    Additional Key Information Documents are available in our trading platform.

    Saxo is a registered Trading Name of Saxo Capital Markets UK Ltd (‘Saxo’). Saxo is authorised and regulated by the Financial Conduct Authority, Firm Reference Number 551422. Registered address: 26th Floor, 40 Bank Street, Canary Wharf, London E14 5DA. Company number 7413871. Registered in England & Wales.

    This website, including the information and materials contained in it, are not directed at, or intended for distribution to or use by, any person or entity who is a citizen or resident of or located in the United States, Belgium or any other jurisdiction where such distribution, publication, availability or use would be contrary to applicable law or regulation.

    It is important that you understand that with investments, your capital is at risk. Past performance is not a guide to future performance. It is your responsibility to ensure that you make an informed decision about whether or not to invest with us. If you are still unsure if investing is right for you, please seek independent advice. Saxo assumes no liability for any loss sustained from trading in accordance with a recommendation.

    Apple, iPad and iPhone are trademarks of Apple Inc., registered in the U.S. and other countries. App Store is a service mark of Apple Inc. Android is a trademark of Google Inc.

    ©   since 1992