Vega (Volatility Sensitivity)
The measure of how much an option's price changes for every 1% change in implied volatility.
Explained Simply
Vega is not a Greek letter — it's a made-up term used in finance to describe volatility sensitivity. A vega of 0.10 means the option gains $0.10 for every 1% increase in IV, and loses $0.10 for every 1% decrease. Long options (calls and puts) have positive vega — they benefit from rising volatility. Short options have negative vega — they benefit when IV falls (IV crush). Vega is highest for at-the-money options and for options with longer time to expiration.
How Tradewink Uses Vega (Volatility Sensitivity)
Vega management is central to Tradewink's options strategies. Before earnings, IV rises — options buyers benefit from positive vega. After earnings, IV crushes — premium sellers with negative vega profit. Our options GEX loop and IV rank monitoring work together to ensure we're positioned correctly for the current volatility regime. The AI tracks total portfolio vega to avoid excessive volatility exposure.
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See Vega (Volatility Sensitivity) in action
Tradewink uses vega (volatility sensitivity) as part of its AI trading signal pipeline. Start getting signals that use this concept to find real opportunities.