lambda

Definition

A value representing the expected percentage change in the price of an option in response to a 1% change in the volatility of the underlying stock. also called kappa, sigma, or vega

Use lambda in a sentence

The percentage change was called Lambda and I had never heard of it before, but knew what it meant for us.

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You may find that it is more profitable to invest in a lambda than it is to invest in some other types of funds.

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Based on the economy and the new product release, they expect to lambda on the option to be around 3. They anticipate that the demand for stock will continue to increase.

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option elasticity kappa