Volatility Smile
A common graphical shape that results from plotting the strike price and implied volatility of a group of options with the same expiration date.
Investopedia Says:
A volatility smile is used by investors to price options in the foreign currency market and the equity option market. Related Terms:
At the Money
Black-Scholes Model
Expiration Date
Implied Volatility
In the Money
Options
Out of the Money
Put Call Parity
Strike Price |