# Volatility Skew Theory

This is the case for equity options, however for foreign exchange options the volatility only decreased at ATM.

Why is it that the vol used for one type of out/in the money is higher than the other, unlike the uniform case for foreign exchange?

• They are different asset classes. Fx is the ratio of two assets - so how do you define "low strike"? According to some arbitrary convention? – will Jul 3 '19 at 8:40