The Strike Skew and the Cost of Implementing Specific Trade Structures

Markets can become entirely destabilized and they generally crash down, not up. Markets superimpose its own strike skew overriding what black sholes would tell us to use. If a stock was at 100 and you could buy the 90 strike put for 5 or the 9080 put spread for 1, you are most probably going to go with the put spread.