Skew Rank

Skew rank is an indicator used by options traders to show whether the volatility skew of an asset is currently steep or flat compared with its own history. Skew is first measured as a single number, commonly the implied volatility of an out-of-the-money put minus that of an equally out-of-the-money call. The rank then locates today's reading within the highest and lowest readings of a look-back period, usually one year: $\text{Skew rank} = (\text{current} - \text{low}) / (\text{high} - \text{low}) \times 100$. If skew is 6 volatility points and has ranged from 3 to 9 over the year, the rank is $(6 - 3) / (9 - 3) \times 100 = 50$.

The calculation mirrors IV rank. A high reading indicates that downside protection through a put option is unusually expensive relative to calls. The term is not standardized: data providers differ in how they define skew and the look-back window, and some report a percentile instead. A single extreme day can distort the range.