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Glossary
ABCDEGIOPRSTV
A
  • Assignment
  • At-the-money (ATM)
B
  • Break-even
C
  • Covered call
D
  • Days to expiry (DTE)
  • Delta (Δ)
E
  • Exercise
  • Extrinsic value
G
  • Gamma (Γ)
I
  • Implied volatility (IV)
  • In-the-money (ITM)
  • Intrinsic value
  • IV rank
O
  • Open interest
  • Out-of-the-money (OTM)
P
  • Premium
R
  • Rho (ρ)
S
  • Strike price
T
  • Theta (Θ)
V
  • Vega (ν)
  • Volume
greek

Vega (ν)

Sensitivity to implied volatility.

Vega measures how much an option's price changes per 1-percentage-point change in IV. Long options have positive vega (benefit from IV rising); short options have negative vega. Vega is highest on ATM, longer-dated options.

Related

Implied volatility (IV)

The market's forward-looking estimate of how much the stock will move.

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