Dan explains how volatility skew can help traders make more informed decisions when selecting strikes for covered calls and cash-secured puts. He starts with the volatility risk premium behind option selling, then breaks down how implied volatility can vary across different strikes on the same stock. That difference, known as vertical skew, can reveal where option buyers and sellers are creating unusual pricing opportunities.

Dan explains the typical volatility pattern, why lower-strike options often carry higher implied volatility and what it means when that relationship changes. Using a real-world example, he shows how strong demand for calls can create an upward-sloping call skew, giving Wheel traders richer premiums at higher strikes but also signaling greater upside risk. He then shows how the same analysis can improve cash-secured put selection and even help evaluate covered strangles.