2.5.5 Vega Neutral (VN)

Vega neutral (VN) is the spot price at which the market maker has little or no vega exposure. At this point, hedging volatility positions becomes less intense, making the price of the underlying less sensitive to buying and selling far out of the money options. So stocks that are driven primarily by large amounts of cheap out of the money options tend to get hung up at this point, fighting against the momentum of those positions.