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.
People Also Ask
What does Vega mean in options trading?
It's the option Greek that measures sensitivity to implied volatility.
How do you use Vega in a sentence?
"This position has a lot of Vega, so it'll swing hard if volatility spikes."
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