How Does Vega Impact an Option’s Price?

Vega measures the sensitivity of an option's price to a 1% change in the underlying asset's implied volatility (IV). A high Vega means the option's price is highly responsive to changes in market expectation of future price swings.

Long option positions have positive Vega, benefiting from rising IV, while short option positions have negative Vega, benefiting from falling IV. Vega is critical because IV is often the most volatile input in the option pricing model.