Editing input lines is one way to change the skew curve. Raising or lowering
a volatility in any input line will affect the skew curve; however, curve
fitting techniques that employ higher order polynomials are more sensitive to
changes in input line volatilities, so the effect of a change in input line
volatility depends on
By contrast, lower order polynomials are less sensitive to input line changes,
so raising or lowering an input line volatility will have a lesser effect on
the skew curve.
To edit an input line, position the mouse pointer on top of the point you want
to edit. Then, double-click and hold down the left mouse key. When you
double-click and hold, two things happen. First, the input line point swells to a
larger dot. Second, the cursor turns into a cross hair. The cursor remains in
this state as long as you hold down the left mouse key. While the cursor is in
this state, you can drag the input point up and down the Y axis (volatility).
Dragging the point up the axis increases the volatility of the respective
option, and dragging it down decreases it.
You can also edit points on an input line using the matrix available through
Dragging Points on Input Lines
