Put Call Skew Patterns

Put call skew patterns represent the preference of the market for either calls or puts at different strike prices. If put options are significantly more expensive than calls at the same distance from the current price, the market is skewed toward downside fear.

In some crypto environments, the skew can sometimes flip towards call options if there is massive optimism and fear of missing out. These patterns are essential indicators for understanding where market participants expect the price to move.

Traders monitor these skews to adjust their directional outlook and to find mispriced options that offer good value compared to the prevailing skew.