What Is the Significance of the ‘Vega’ Greek in a Highly Volatile Crypto Market?

Vega measures the sensitivity of an option's price to a change in implied volatility. In the highly volatile crypto market, Vega is critical because large, sudden changes in IV are common.

A market maker who is long Vega profits from an IV increase, while one who is short Vega loses. Managing Vega exposure is essential for profiting from the extrinsic value of options, independent of directional price moves.