The Volatility Term Structure chart plots implied volatility (IV) against expiration dates for one or more strike prices. It reveals how the market prices risk over time -- whether near-term uncertainty is higher or lower than long-term uncertainty. This view is especially useful for identifying event-driven volatility and choosing the right expiration for your trades.

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, select the Volatility tab, and look for the Term Structure section.

 Open the ticker page, tap Options, then select the Analysis sub-tab. Scroll to the Volatility Term Structure chart.

 The mobile version displays an interactive chart with multi-strike comparison. You can toggle between Average, Call, and Put views to isolate different perspectives on the term structure.

https://cdn.ainvest.com/kamisAssets/Screenshot2026-01-30at12.rh8dxtcuymr.png

Volatility Term Structure chart showing implied volatility plotted against expiration dates with multiple strike prices overlaid

The chart displays the following elements:

 Implied volatility as a percentage (e.g., 18% to 49%)

 Expiration dates, spanning from near-term to long-term (e.g., Jan 30, 2026 through Dec 15, 2028)

 Each line represents a different strike price overlaid for comparison (e.g., 190 in blue, 191 in cyan, 192 in pink, 192.5 in purple)

 Switch between Average, Call, and Put views

 Use the gear icon to configure and the share icon to export

The term structure reveals two key patterns that every options trader should understand.

When IV increases as expirations extend further into the future, the term structure slopes upward from left to right. This is called contango and represents the "normal" state of the volatility market. The logic is straightforward: longer time horizons carry more uncertainty, so the market prices in higher IV for distant expirations.

When near-term IV is higher than long-term IV, the term structure slopes downward or shows a pronounced "hump" at a specific expiration. This is called backwardation and signals that the market expects a significant event in the near term -- an earnings announcement, FOMC decision, product launch, or other catalyst. The elevated near-term IV reflects the concentrated risk around that event.

From the NVDA term structure chart, several observations stand out:

Near-term expirations (Jan 30) show relatively low IV of approximately 18-20%, rising steeply through mid-2026

Long-dated expirations (late 2028) show IV around 49%

The upward slope is a textbook contango pattern, indicating that no near-term event is causing elevated short-term IV at this snapshot

All four strike prices (190, 191, 192, 192.5) track closely together, confirming consistent pricing across nearby strikes

When overlaying multiple strikes on the term structure chart, look for these signals:

Convergence across strikes confirms that IV readings are consistent and reliable. This is the normal case for nearby ATM strikes.

Divergence at a single strike may indicate concentrated positioning or unusual demand at that specific price level. This warrants further investigation -- check open interest and volume at that strike.

ATM strikes provide the most liquid and reliable IV readings. Use them as your primary reference.

Far OTM strikes may produce noisy or unreliable term structures due to wide bid-ask spreads and low trading activity.

Before an earnings announcement, you might observe NVDA's term structure shift into backwardation: the expiration immediately after earnings shows IV of 55%, while the next monthly expiration sits at 38%. This gap represents the market's expectation of a "volatility crush" -- the phenomenon where near-term IV collapses after the event passes and uncertainty resolves.

 (short straddles, short strangles, iron condors) benefits from the volatility crush. You collect elevated premium before the event and profit as IV contracts afterward -- provided the stock does not move beyond your breakeven points.

 (long straddles, long strangles) requires the stock to move enough to overcome both the IV decline and the time decay. The threshold for profitability is higher when you are buying into elevated IV.

Check term structure before every trade. 

Buying options when near-term IV is elevated (backwardation) means paying a premium for volatility that may soon decline. Be sure the expected move justifies the cost.

 Use the multi-strike overlay to verify that IV patterns hold across the strike range. Significant divergence at a single strike may indicate a concentrated position or unusual order flow.

 Compare the term structure slope across multiple sessions. A steepening contango suggests the market is pricing in more long-term uncertainty. A shift from contango to backwardation signals a near-term event gaining significance.

 The term structure tells you about the time dimension of IV; the smile tells you about the strike dimension. Together, they give you a complete view of the volatility surface.

Try it on Ainvest: Open the Volatility Term Structure — compare IV across expiration dates for any ticker.

Volatility Term Structure

The Volatility Smile chart plots implied volatility (IV) against strike price for one or more expiration dates. The resulting curve typically forms a "smile" or "skew" shape, revealing how the market assigns different risk premiums to options at different price levels. Understanding this shape is essential for evaluating whether an option is relatively cheap or expensive compared to its neighbors.

, select the Volatility tab, and look for the Volatility Smile section.

 Open the ticker page, tap Options, then select the Analysis sub-tab. Scroll down past the Strike Price section to find the Volatility Smile chart.

 The mobile experience offers richer interactivity. You can overlay multiple expiration dates on the same chart -- for example, Jan 30, Feb 02, Feb 04, and Feb 06 displayed simultaneously in different colors. The chart also includes a toggle to filter by Average, Call, or Put IV.

https://cdn.ainvest.com/kamisAssets/Screenshot2026-01-30at12.bxmacjw7sd4.png

Mobile Analysis view showing the volatility section with smile chart and expiration toggles

https://cdn.ainvest.com/kamisAssets/Screenshot2026-01-30at12.y3n99q31qvr.png

Volatility Smile chart showing implied volatility plotted against strike price with multiple expiration dates overlaid in different colors

 Implied volatility as a percentage (e.g., 19% to 544%)

 Strike prices spanning the available range (e.g., $50 to $360 for NVDA)

 Each line represents a different expiration date, overlaid for comparison (blue, cyan, pink, purple)

 Switch between Average, Call, and Put views to see combined or separated IV

 Use the gear icon to configure the chart and the share icon to export

At-the-money (ATM) options -- those with strike prices near the current stock price -- typically have the lowest IV. As you move further out-of-the-money (OTM) in either direction, IV rises. Deep OTM puts appear on the left side of the chart, deep OTM calls on the right. When both sides curve upward, the pattern forms the characteristic "smile."

In practice, equity options more often show a skew rather than a symmetric smile. The left side of the curve (OTM puts) tends to have higher IV than the right side (OTM calls). This asymmetry reflects the market's tendency to price downside protection at a premium. Crash risk -- the possibility of sudden, large declines -- makes put buyers willing to pay more, driving up IV on the left side of the chart.

Shorter-dated expirations often show a steeper smile or skew than longer-dated ones. If a near-term expiration suddenly displays much higher IV than normal relative to other expirations, it likely indicates an expected event such as an earnings announcement, FDA decision, or major economic release. This is one of the most actionable signals the Volatility Smile chart provides.

Before earnings announcements, the volatility smile typically steepens dramatically. Traders pay up for protective puts ahead of potential downside surprises, driving put IV higher. Simultaneously, speculative call buying can elevate call IV. The result is a much steeper and more pronounced skew than during normal market conditions. After the earnings announcement, the skew typically flattens as event uncertainty resolves.

Very far OTM options can display extremely high IV percentages -- sometimes exceeding 500%. This is partly a mathematical artifact: when an option's absolute price is very small, even minor changes in value translate into large percentage shifts in implied volatility. Exercise caution when interpreting IV at the extreme ends of the strike range. The most reliable readings are near the ATM zone.

Consider NVDA with four expiration dates displayed on the Volatility Smile chart. The Jan 30 curve (0DTE, shown in blue) is dramatically steeper than the Feb 06 curve (shown in purple). At the $50 strike, IV for the 0DTE expiration exceeds 500%, compared to roughly 150% for Feb 06. This is expected behavior: zero-days-to-expiration options carry extreme gamma, making far-OTM strikes extraordinarily sensitive to any price movement.

The key insight appears near the ATM zone, around the $187.50 area. Here, IV across all four expirations converges to a narrow range of approximately 19-25%. This confirms that ATM options offer the most "fair" pricing relative to the market's expected movement -- the smile effect is minimal at-the-money and intensifies as you move away from the current price.

 Compare the smile across nearby expirations. If one expiration's ATM IV is significantly higher than the others, it likely brackets an expected catalyst event.

 Use the Call/Put toggle to determine whether skew is driven primarily by put demand (indicating downside hedging activity) or call demand (indicating upside speculation). This distinction affects strategy selection.

 When the skew becomes less pronounced -- the difference between OTM and ATM IV narrows -- it can indicate that the market is less concerned about tail risk. A steepening smile signals the opposite.

Focus on the ATM zone for fair-value reads.

 ATM IV is the most liquid and least distorted data point. Use it as your baseline when evaluating whether specific strikes are relatively cheap or expensive.

 — compare IV across strike prices for any ticker.

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