ultima

(ŭl'tə-mə)
n.
The last syllable of a word.

[Latin, feminine of ultimus, last. See ultimate.]

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The rate at which the vomma of an option will react to volatility in the underlying market. It is the third order derivative of the option value with respect to volatility, or the derivative of vomma with respect to the derivative of volatility.

Ultima is part of the group of measures known as the "Greeks" (other measures include delta, gamma and vega) which are used in options pricing.

Investopedia Says:

Ultima is useful to investors who are making options trades and take the vomma and vega into consideration, especially when implementing exotic options which may change format over the period of maturity. This metric is one of the inputs utilized in the Black-Scholes model.

 

Related Links:
Understanding price influences on options positions requires learning delta, theta, vega and gamma. Getting To Know The "Greeks"
These risk-exposure measurements help traders detect how sensitive a specific trade is to price, volatility and time decay. Using "The Greeks" To Understand Options
Options can be an excellent addition to a portfolio. Find out how to get started. The Basics Of Buying Options
Selling options can seem intimidating but with these tips, you can enter the market with confidence. The Ins And Outs Of Selling Options

For a list of words related to ultima, see:

• Linguistics and Writing Systems - ultima: last syllable of a word

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