Options 101 Course

Take the Spot Test

The Greeks Part II

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Rho - Ρ

  • Rho is the measure of an option's sensitivity to a 1% move in the Risk Free Interest Rate.
  • Call rho is always positive (helpful) and put rho is always negative (unhelpful).
  • Even large changes in interest rates have relatively little effect on options premiums.  Rho is generally considered to have the least impact of the options greeks, particularly in a low interest rate environment.

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