Bank Nifty IV Skew Explained

IV skew = difference in IV between OTM puts and OTM calls. In Bank Nifty, puts usually carry higher IV (downside fear). When skew steepens (puts much pricier), the crowd expects a drop; when it flattens, complacency. Steepening skew + rising India VIX = stress incoming. As a feature: iv_skew = iv_otm_put - iv_otm_call, z-scored over 60 days. The model flags extreme skew as a regime filter -- block trades when skew z > 2.5 (crowd panic) because mean-reversion traps retail. Skew is not a trade; it is a context dial. Read it with OI and PCR, never alone.