Workflows

VOL Matrix: Reading Term Structure, IV Premium, Surface, and Expected Move

Use four connected volatility views to compare expiration pricing, strike shape, local richness, and the range currently priced by options.

By HedgePulse EducationReviewed by HedgePulse Product3 min read
01 / Term structure

Start with expiration pricing

Compare 25-delta skew and ATM IV across the same expiration list before studying individual strikes.

  • Put-rich versus call-rich skew
  • ATM IV by date
  • Red flags a backwardated step
02 / Smile and Surface

Move from one expiration to the full grid

Smile compares IV across strikes for selected dates. Surface puts dates on X and actual strikes on Y.

  • Up to three Smile curves
  • Up to ten Surface dates
  • Blue is lower IV; red is higher IV
03 / IV Premium

Find local bumps in the term curve

Each interior expiration is compared with a calendar-weighted baseline between its immediately adjacent displayed expirations when both have valid ATM IV.

  • Red = locally expensive
  • Green = locally cheap
  • Not a directional signal
04 / Expected Move

Read the range priced by the ATM straddle

The current ATM call plus put premium creates a spot-plus-or-minus range for each expiration.

  • 30D, 90D, 180D, or All
  • Current price, not a guarantee
  • Missing ranges remain gaps
05 / Workflow

Use comparison before conclusion

Read the term curve, inspect the unusual date, check its strike shape, then place the result inside the priced range.

  • Expiration context
  • Strike context
  • Range context

Compare current volatility pricing

Open VOL Matrix, choose a symbol, then compare its four views.

View Question
Term Structure How do skew and at-the-money IV vary by expiration?
Smile / Surface Where is IV concentrated across strikes and dates?
IV Premium Which date is rich or cheap versus nearby dates?
Expected Move Cone What range does the current ATM straddle price?

IV means implied volatility. ATM means at the money.

Try Smile, then Surface

Select Smile and choose up to three expirations. Each curve plots IV by strike. Compare its height near spot and its shape above and below spot.

Switch to Surface for a heatmap:

  • Horizontal axis: expiration.
  • Vertical axis: strike.
  • Color: IV for the selected Mid, Call or Put basis.

Hover a cell for the date, strike and IV. Blue is lower and red is higher relative to the displayed values. These colors do not mean bullish or bearish. Empty cells are missing data, not zero IV.

Read Term Structure

The panel lists up to 30 returned expiration dates.

25-delta skew compares call and put IV near 25 delta. Put Richer means puts carry more IV; Call Richer means calls do. Neither predicts direction.

ATM IV shows implied volatility near spot for each expiration. A red step marks an ATM-IV value above the next displayed date's value. Green means that red-step condition is not flagged; check missing values and the last row separately.

Read IV Premium

IV Premium compares a date's ATM IV with a straight-line baseline between its neighboring dates, weighted by calendar time.

Display Meaning
Red positive bar Above the local baseline
Green negative bar Below the local baseline
White line Actual ATM IV

+4.20 vol pts means 4.20 percentage points above the baseline. The first and last dates have no premium bar because they lack neighbors on both sides.

Use this view to find dates worth investigating. Thin or irregular quotes can create spikes.

Read Expected Move Cone

The range uses the current call-plus-put premium at the paired ATM strike, added to and subtracted from spot.

Example: spot 100 and straddle premium 6 give a range of about 94–106.

30D, 90D, 180D and All filter the displayed expirations. The range is a current pricing estimate, not a confidence interval or a guaranteed boundary.

A quick review

  1. Find a date that stands out in Term Structure.
  2. Compare it with neighboring dates in IV Premium.
  3. Inspect its Smile, then use Surface for the wider comparison.
  4. Check the priced range in Expected Move Cone.

These views describe relative option pricing. Compare them with price and exposure before forming a conclusion.