Definition. Options Implied Volatility Term Structure is the at-the-money implied volatility of options expiring on different dates in the future, showing how the market prices the relation between volatility and time.

Technical. The legend reports the state of the term structure at several recent points in time, namely latest, 1 day, 2 days, 1 week, and 2 weeks ago.

Interpretation. The curve most often slopes upward, and its steepness can be a sign of complacency in the markets, with implied volatility for options expiring shortly at times 50% lower than that of longer-dated options. When near-term implied volatility exceeds longer-dated implied volatility, the structure is in "backwardation", which can indicate panic and demand in the options markets as investors price in greater risk for short-term contracts than for those expiring further in the future.