# Volatility Smile

*Derivatives & Options — Finicade finance glossary*

The real-world pattern where options far from the money imply higher volatility than those at the money — plotting them curves like a smile or skew. It's the market admitting big moves happen more than a bell curve predicts.

**Also known as:** volatility smile, volatility skew, the smile skew

**Related terms:** [Implied Volatility](https://finicade.com/glossary/implied-volatility), [Fat Tails](https://finicade.com/glossary/fat-tails), [Black–Scholes Model](https://finicade.com/glossary/black-scholes)

**Taught in:** Hull Street — Volatility & the Smile

Source: https://finicade.com/glossary/volatility-smile-skew