noun
General Slang
Vega
· noun · finance
The option Greek for sensitivity to implied volatility.
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Definitions
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How much an option's price moves when implied vol moves one percentage point. Long options are long vega — you want IV to rip. Short options are short vega — you're praying for calm. The joke: vega isn't actually a Greek letter, someone just liked the name.
“Don't sell puts into earnings — you're short vega right when IV is about to crush.”
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Vega In A Sentence
Don't sell puts into earnings — you're short vega right when IV is about to crush.
Origin & Usage
Trader slang from the 1980s options boom; picked because it sounded Greek. Purists call it kappa.
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