Sensitivity of option price to a 1% change in implied volatility.
Long options have positive vega — gain when IV rises. Short options have negative vega. Pre-earnings IV expansion + post-earnings IV crush is a classic vega trade pattern. Long-dated options have higher vega than near-term.
Sensitivity of option price to a 1% change in implied volatility. Long options have positive vega — gain when IV rises. Short options have negative vega. Pre-earnings IV expansion + post-earnings IV crush is a classic vega trade pattern. Long-dated options have higher vega than near-term.
In derivatives, Vega is one of the building blocks investors use to compare opportunities and assess risk. Understanding it helps you read research notes, earnings reports, and market commentary without getting lost in jargon.
Long options have positive vega — gain when IV rises. Short options have negative vega.
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