For options and similar types of derivatives, the skew is the slope of the implied volatility curve for a given expiration date. It differs from the implied volatility term-structure that refers to the implied volatility for different expiration dates. Skew has various types in relation to option prices, depending on multiple factors such as regulatory rules, liquidity constraints, government intervention and dependence on the asset class.

Skew is commonplace in equities, FX and interest rate markets. The skew is handled with a sort of calibration under a volatility model (e.g., stochastic volatility model) to derive the correlation between the Brownian motions of the underlying instrument and that of the implied volatility.