What Is Vega?

Sid Ghosh

Reviewed by

Sid Ghosh WSO Editorial Board

Expertise: Investment Banking | Private Equity

Vega is a term used in trading which measures the sensitivity of an option to changes in the volatility of the underlying asset, i.e. if an asset moves in price by 5% what will be the corresponding change in price of an option based on that asset?

Vega is different to delta as it does not concern itself with the change in the price of the underlying asset, but rather the volatility of the underlying asset.

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Sid Ghosh

Sid Ghosh is a member of WSO Editorial Board which helps ensure the accuracy of content across top articles on Wall Street Oasis. Sid began his career as an investment banking analyst at Rothschild and Co., where he did mergers & acquisitions and helped build the firm's North American Equity Advisory practice. Following the completion of his IB program, he became an associate at Pantheon. Sid then worked as a senior associate at Dunbar Capital, a privately-held alternative investment firm before joining 747 Capital as an associate. Sid graduated from NYU Stern and is completing his MBA at Columbia.. This content was originally created by member WallStreetOasis.com and has evolved with the help of our mentors.

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