Vega is a measurement of an option’s price sensitivity to changes in implied volatility of the underlying asset. In other words, Vega measures how much an option price will change as the implied volatility of the underlying asset changes.

A higher Vega means that the option price will be more affected by changes in implied volatility, while a lower Vega means that the option price will be less affected by changes in implied volatility.

For example, suppose an investor holds a call option on a stock with a Vega of 0.05. If the implied volatility of the stock increases by 1%, the price of the option will increase by 0.05. Conversely, if the implied volatility decreases by 1%, the price of the option will decrease by 0.05.

Vega is an important factor to consider when trading options, especially for strategies that involve taking positions on implied volatility. It can help traders assess the potential risk and reward of an options trade based on changes in volatility.