Vertical Skew X and Y axis

Discussion in 'OptionVue Forum' started by Murphy Tan, Jun 23, 2016.

  1. Murphy Tan

    Murphy Tan Well-Known Member

    Hi all, I'm a newbie in options trading. I looked at Vertical Skew in OptionsVue and found that the Volatility is plotted against LN(S/K)/Sqrt(t). I was expecting the x axis to be Prices instead. Could anyone advise what LN(S/K)/Sqrt(t) is? Is this standard deviation around the current price ?

  2. Kevin Lee

    Kevin Lee Well-Known Member

    That's moneyness normalized by time to expiration. It's a better way to measure if you want to compare across different underlying prices and different expiration dates. Here's more information if you're interested
  3. Murphy Tan

    Murphy Tan Well-Known Member

    Thanks Kevin!

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