In today's segment Beef and Anton discuss the greek Vega which describes an option's volatility. Although it may seem esoteric it is in fact a very usable and understandable metric. As the guys show in this segment Vega can actually be broken down into dollars and cents for the bottom line P&L.
Various strategies display greater sensitivity to a change in Vega. Straddles, for example, see a larger change in P&L given a change in vega than that of a strangle.
Most interesting of all is the fact that this investigation into Vega further provides evidence of a timeframe with 45 DTE with an exit point of 21DTE, make a lot of logical sense.
If you want to get more comfortable understanding greek life, check out today's segment!