Filter by Categories
Accounting
Banking

Derivatives




Short Vega


A position in options (vega) in which any decrease in the implied volatility of the underlying asset will generate a profit, even without a move in the underlying asset. For example, in a short calendar, the position is short vega when an investor shorts farther out options and long front month options. Therefore, as implied volatility moves down, the position makes money and as volatility decreases, it loses money, all else being the same.



ABC
Derivatives have increasingly become very important tools in finance over the last three decades. Many different types of derivatives are now traded actively on ...
Watch on Youtube
Remember to read our privacy policy before submission of your comments or any suggestions. Please keep comments relevant, respectful, and as much concise as possible. By commenting you are required to follow our community guidelines.

Comments


    Leave Your Comment

    Your email address will not be published.*