Each example assumes a 5 percentage point implied volatility rise (a typical IV-spike scenario) against a $10,000 portfolio. Per-contract vega values are illustrative and would in practice come from an option pricer such as VegaCalculator.com.
1. Long single call
Ten contracts of an at-the-money 30-day call. Vega per contract: 0.12.
Total vega = 0.12 × 10 × 100 = $120 per 1pp
Impact (5pp rise, long) = +$120 × 5 = +$600
Exposure % = $600 / $10,000 = 6.00%
Elevated
Long calls benefit from rising IV. The position is meaningfully exposed.
2. Covered call (one short call against 100 shares)
One short at-the-money call against 100 long shares. The shares contribute zero vega. Vega per contract: 0.12.
Total vega = 0.12 × 1 × 100 = $12 per 1pp
Impact (5pp rise, short) = -$12 × 5 = -$60
Exposure % = $60 / $10,000 = 0.60%
Low
A single covered call has negligible portfolio-level vega. Selling more contracts scales linearly.
3. Short straddle (sell call and put at the same strike)
One short at-the-money call plus one short at-the-money put on the same expiration. Both legs are short and both are near at-the-money, so vega adds. Vega per leg: 0.12.
Per-leg vega = 0.12 × 1 × 100 = $12 per 1pp, per leg
Total vega (both legs) = $24 per 1pp
Impact (5pp rise, both short) = -$24 × 5 = -$120
Exposure % = $120 / $10,000 = 1.20%
Low
For a single straddle the dollar exposure is small, but short-vol positions are notoriously tail-risky — a 20-point IV spike turns the same position into a 4.8% hit.
4. Iron condor (short body, long wings)
A four-leg structure: sell a near-the-money call and put (the body), buy a further out-of-the-money call and put (the wings). The body legs have higher vega than the wings, so the net position is short vega.
Per-leg vega assumed: body legs 0.12 each (short), wing legs 0.06 each (long).
Net vega per condor = -(0.12 + 0.12) + (0.06 + 0.06) = -0.12
For 5 condors: -0.12 × 5 × 100 = -$60 per 1pp
Impact (5pp rise) = -$60 × 5 = -$300
Exposure % = $300 / $10,000 = 3.00%
Moderate
Wings hedge some but not all of the body vega. Net short vega means rising IV hurts the position.
5. Mixed portfolio (long calls partially offset by short puts)
Five long calls (vega 0.10 each) and three short puts (vega 0.08 each) on the same underlying. The long-call vega is positive; the short-put vega is negative; net exposure is the difference.
Long-call vega = +0.10 × 5 × 100 = +$50 per 1pp
Short-put vega = -0.08 × 3 × 100 = -$24 per 1pp
Net vega = +$50 - $24 = +$26 per 1pp
Impact (5pp rise) = +$26 × 5 = +$130
Exposure % = $130 / $10,000 = 1.30%
Low
Offsetting longs and shorts produces net exposure smaller than either leg alone — a rough form of vega hedging.
What to read from these
- Single contracts of equity options have small dollar vega; exposure scales with the number of contracts.
- Multi-leg short-vol structures (short straddles, iron condors) often look small under modest IV moves but are dangerous in volatility spikes.
- A position can have low net vega while having large gross vega — the model only sees the net, so be aware of the underlying gross when interpreting.
- Stress-test by re-running with a larger IV move (10 or 20 points) to see how the category shifts.
How to use these on the home page tool. The home page calculator handles one position at a time. To model multi-leg structures, compute each leg's vega exposure separately, sum the signed totals, then enter the net into the tool with direction set to long if positive (or short if negative). The
methodology page covers this.