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Definition · updated 2026-10-21
Vega
Vega is how much an option's price changes for a one-point change in implied volatility: with vega 0.12, a rise in IV from 30% to 31% adds $12 per contract. Long options are long vega and benefit when uncertainty rises; short options are short vega and benefit when it falls, which is the whole mechanism of an IV crush.
See it live: /tools/options-profit-calculator.
Where vega lives
Vega is largest at the money and for longer-dated contracts; a 0DTE option has almost none. Earnings trades are vega trades first: implied volatility rises into the report and collapses after it, often more than the stock moves.
Frequently asked questions
- What happens to vega at expiration?
- It goes to zero. With no time left, implied volatility has nothing to act on, which is why an IV change the morning of expiration barely moves a 0DTE option.
- Is positive vega good?
- It is good when volatility is about to rise and expensive when it is about to fall. Buying options before earnings is long vega into the one event where IV reliably collapses.