Investment Term For The Day -Vega
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Description
Vega is the measurement of an option's price sensitivity to changes in the volatility of the underlying asset. Vega represents the amount that an option contract's price changes in reaction...
show moreVolatility measures the amount and speed at which price moves up and down, and can be based on recent changes in price, historical price changes, and expected price moves in a trading instrument. Future-dated options have positive Vega while options that are expiring immediately have negative Vega.
Option holders tend to assign greater premiums for options expiring in the future than to those which expire immediately.
Information
Author | Africa Business Radio |
Organization | Africa Business Radio |
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