Module 2 Lesson 4

Question 1

The more uncertainty, the more ______ options become.

Answer 1

Valuable.

Question 2

When option Volatility increases in either calls or puts it called?

Answer 2

Vega.

Question 3

Vega is defined as?

Answer 3

The impact on the option price of a 1% increase in volatility.

Question 4

When is Vega higher or Lower.

Answer 4

Vega is higher for longer dated options and not a factor for shorter dated options.