Extreme put skew (z > +2σ)

Puts overpriced vs calls. Market fearful. Historically bottoms-near. Fade by selling cash-secured puts or buying calls.

Extreme call skew (z < −2σ)

Calls overpriced vs puts. Melt-up positioning. Often near tops. Fade with covered-calls or put-spreads.

Skew steepening into earnings

Often signals informed positioning — direction of skew = direction of expected post-earnings move 60%+ of the time historically.