Volatility skew describes an asymmetric balance of demand between the and This happens when greater risk is perceived to either the upside or the downside and is reflected by the of the individual options. When more risk is perceived to the downside, the puts may see increased demand causing them to trade more expensively than the calls. This is more typical, and known as or On the flip-side, if a large price increase is anticipated, the calls may see a rise in demand resulting in higher prices relative to the puts. This is known as or