DEFINITION of 'Vega Neutral'
A method of managing risk in options trading by establishing a hedge against the implied volatility of the underlying asset. A vega neutral option position will be not be sensitive to volatility fluctuations. These strategies are used to hedge against the risks of price sensitivity, secondorder time price sensitivity and time sensitivity, respectively.
BREAKING DOWN 'Vega Neutral'
A vega neutral portfolio is still subject to risk. For example, in a portfolio of options maturing at different times, changes in volatility over time can dramatically affect total returns, making the portfolio sensitive to time vega. Furthermore, if the assumptions used to establish a position turn out to be incorrect, a position that is intended to be neutral can actually be risky. Vega is one of the "options Greeks" along with delta, gamma, rho and theta. These are used to measure different types of risk in options portfolios. Other options riskmanagement positions include delta neutral, gamma neutral and theta neutral.

Gamma Neutral
A method of managing risk in options trading by establishing ... 
Vega
The measurement of an option's sensitivity to changes in the ... 
Greeks
Dimensions of risk involved in taking a position in an option ... 
Speed
The rate at which the gamma of an option or warrant will change ... 
Price Sensitivity
The degree to which the price of a product affects consumers ... 
Lambda
The ratio of the percentage change in an option contract's price ...

Trading
Measuring Options With the Greeks
Delta, gamma, theta and vega are “the Greeks,” and they provide a way to measure the sensitivity of an option’s price. 
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Using "The Greeks" To Understand Options
These riskexposure measurements help traders detect how sensitive a specific trade is to price, volatility and time decay. 
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The Forex Greeks And Strategies
We look at the different kinds of Greeks and how they can improve your forex trading. 
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Getting To Know The "Greeks"
Understanding price influences on options positions requires learning about delta, theta, vega and gamma. 
Trading
Understanding Vega
In options trading, vega represents the amount option prices are expected to change in response to a change in the underlying asset’s implied volatility. 
Trading
Capturing Profits With PositionDelta Neutral Trading
This trading strategy will show you how to gain from a decline in implied volatility on any movement of the underlying. 
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An Introduction To GammaDelta Neutral Option Spreads
Find the middle ground between conservative and highrisk option strategies. 
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The Anatomy of Options
Find out how you can use the "Greeks" to guide your options trading strategy and help balance your portfolio. 
Trading
The Ins And Outs Of Selling Options
Selling options can seem intimidating but with these tips, you can enter the market with confidence. 
Trading
Implied Volatility: Buy Low And Sell High
This value is an essential ingredient in the option pricing recipe.

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