Step One: Review the Fixed Strike Matrix with Statistical Mode enabled

• Use the Zoom Out feature in settings to see a complete view of the current IV landscape. The default is to compare today’s IV to the average IV over the last 90 days. Red indicates relatively low current IV, while green indicates relatively high current IV.
• Turn on Show Highlights within settings to bring up a yellow border around cells that have unusually higher or lower IV than adjacent cells.
• Toggle the Skew Premium mode to visualize which options are the most expensive or cheap.

Step Two: Use the Term Structure chart for IV for at-the-money (ATM) options

• Examine the shape of the term structure to see if IV is higher for nearterm expiration dates or further out expirations for the same strike over time.
• The grey shaded area (cone) represents the 10%-90% of recent IV history, so look to see where current IV projections are relative to historical IV levels.
• Look for earnings or significant economic events to create elevated IV for a given date in the future.

Step Three: Look at the Skew Tab to see the Volatility Skew 

• Examine the shape of the curve’s “smile” to see if there is call skew or put skew - this is an indicator of where demand currently exists for options across strikes at a single expiration.
• With statistics mode enabled, check to see where IV is lowest relative to its recent trading history.
• Curves or IV projections that are lower in the grey cone indicate a lower relative IV while curves or IV projections that are higher in the grey cone indicate a higher relative IV.

SpotGamma Alpha subscribers can access the SpotGamma Volatility Dashboard here.