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Investment
Vega
A Greek that measures how much an option’s price changes when implied volatility changes by 1%.
Vega is highest for longer-dated options. It is the only Greek that is not directly related to the stock price. Traders who expect volatility to rise buy options with high vega; those who expect it to fall sell them.
It's the volatility dial on your option — turn volatility up and the option usually gets more expensive.
Real world: If you own options with high vega and implied volatility suddenly jumps from 25% to 35% before earnings, your options can increase in value even if the stock price doesn’t move.
💡 Vega is how you profit (or lose) purely from changes in market fear.