A "Volatility Smile" is a graphical representation of the implied volatility of options across different strike prices. It typically shows that options with strike prices far from the current market price—both in-the-money and out-of-the-money—tend to have higher implied volatility compared to at-the-money options. This creates a smile-like shape when plotted on a graph. This phenomenon occurs because traders often perceive greater risk in extreme price movements, leading to higher premiums for these options. The volatility smile is important for options traders, as it helps them assess market sentiment and make informed trading decisions regarding options and derivatives.