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Vega

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Vega
The Vega of an Option measures how sensitive the Option's price is to changes in the level of price Volatility of the Underlying instrument.
    
The greater the Volatility of the Underlying instrument, the higher the chance that the Option is in the money before maturity. This means that both calls and puts Will tend to increase in value as Volatility heightens. Vega shows the increase in value that should be expected if Volatility goes up by one point. The Vega, measures sensitivity to Volatility.
    
Volatility most frequently refers to the standard deviation of the change in value of a financial instrument with a specific Time Horizon.
Posted by  Catalyst Financial Partners LLC
 
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