25-Delta Risk Reversal, Skew & Volatility Smile (Deribit)
25-delta risk reversal, skew and the IV smile are BTC options sentiment indicators. Below is what each one shows and how to read the implied-volatility skew on Deribit.
What is the 25-delta risk reversal
The 25-delta risk reversal is the implied-volatility difference between the 25-delta call and the 25-delta put. A positive value means calls are richer than puts (bullish skew); negative means puts are richer (fear, demand for protection).
BTC options skew
Skew shows how implied volatility changes across strikes for one expiry. In crypto, put skew (downside fear) intensifies on selloffs, while call skew rises in euphoria. The 25-delta skew is a fast read on shifting sentiment.
The implied volatility smile on Deribit
The volatility smile is the shape of the IV curve across strikes: the wings (OTM calls and puts) are usually richer than the center. The smile’s asymmetry reflects what the market pays a premium for — downside protection or upside.
Glossary terms
FAQ
The IV difference between the 25-delta call and put. Positive means bullish skew; negative means demand for downside protection.
Skew is the slope/asymmetry of the IV curve across strikes; the smile is the full curve shape where wings are richer than the center. Risk reversal numerically measures skew.
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Information is for analytical and educational purposes only and does not constitute investment advice. Cryptocurrency trading carries high risk.