0-9 A B C D E F G H I J K L M N O P Q R S T U V W X Y Z

Featured video
External links


Hide links

Option vega measures how much the price of option changes in relation to the Volatility of the Underlying asset or commodity. Vega represents the change in option value for a 1% change in the level of Implied Volatility. For example, an option may have a value of $5 and a vega of 0.20. If Volatility is 25% and it rises to 30%, then the option’s value would increase to $6 (all things being equal and without considering the values of the other Greeks).

Since Volatility is a key determinant of an option's Extrinsic Value, vega allows the implications of a change in Volatility to be quantified and predicted.
Rating: 0/5 (0 votes cast)
Contributed by: Ralph Windsor

Related Directory Entries

External Links

Suggest a Link

The Greeks: What They Are and How to Use Them

ThinkOrSwim guide to The Greeks.

Rating: 0/5 (0 votes cast)

View ThinkOrSwim in Options Market Glossary Directory

Vega (The Options Guide)

Options Guide article on vega.

Rating: 0/5 (0 votes cast)

View Options Guide Strategy Finder in Options Market Glossary Directory

Vega Definition

A definition of vega from Investopedia

Rating: 0/5 (0 votes cast)
What is option vega?

Article explaining the significance of vega from volcube.com

Rating: 0/5 (0 votes cast)


There are currently no comments for this term.

Post a Comment

You must be registered and logged in to post a comment.


There are currently no videos for this term.