How to Read Skew Before a Big Event

A clean lesson in how options price a known event. SPX ground through a quiet session, a 15 to 20 point range all day, because the market is waiting. The divergence in the chain tells you everything: the zero-day options carry only a 10-point implied move for the final hour, while the next day carries 83 points, textbook binary-event pricing. Mike Butler then checks the skew, clearly tilted to the downside, a put around 1,700 dollars against a call at 1,200 at equidistant strikes. 📊 tastylive: https://www.tastylive.com/ 📰 Get Tom's pre-market analysis every morning: https://www.tastylive.com/newsletters 📘 FREE Options Strategy Guide: https://tinyurl.com/bp9ms763 📱 Follow tastylive on X: https://x.com/tastyliveshow Chapters 00:00 What are the options actually saying? 01:13 An exceptionally quiet session 01:45 Ten points now, 83 tomorrow 02:14 Still plenty of vol through the week 02:24 A binary-event type day 02:47 A little backwardation in the curve 03:18 Checking the skew 04:08 The put costs more than the call 04:52 The probability of a bigger move 06:56 Why the tails are priced down #tastylive #mathcheck #mikebutler #spx #impliedmove #putskew #zerodte #volatility #optionstrading #stockmarket tastylive is a real financial network, producing hours of live programming every day. Follow along as our experts navigate the markets, provide actionable trading insights, and teach you how to trade. With over 120 original segments, and over 25 personalities, we'll help you take your trading to the next level, whether you are new to trading or a seasoned veteran. tastylive content is created, produced, and provided solely by tastylive, Inc. ("tastylive") and is for informational and educational purposes only. It is not, nor is it intended to be, trading or investment advice or a recommendation that any security, futures contract, digital asset, other product, transaction, or investment strategy is suitable for any person. Trading securities, futures products, and digital assets involve risk and may result in a loss greater than the original amount invested. Investment information provided may not be appropriate for all investors and is provided without respect to individual investor financial sophistication, financial situation, investing time horizon or risk tolerance. Options, futures, and futures options are not suitable for all investors. Prior to trading securities, options, futures, or futures options, please read all applicable risk disclosures, including, but not limited to, the Characteristics and Risks of Standardized Options Disclosure and the Futures and Exchange Traded Options Risk Disclosure Statement found at https://tastytrade.com/disclosures/. Past performance is not indicative of future results. Performance is not presented net of all commissions, fees, and expenses. Multi-leg option strategies incur higher transaction costs than single leg trades as they involve multiple commission charges. Examples provided are for illustrative, informational, and educational purposes only and are not intended to be reflective of results you can expect to achieve. Supporting documentation for any claims, including claims made on behalf of options programs), comparisons, statistics, or other technical data, if applicable, will be supplied upon request. tastylive, through its content, financial programming or otherwise, does not provide investment or financial advice or make investment recommendations. tastylive is not a licensed financial adviser, registered investment adviser, or a registered broker-dealer.