Rho (Options Greek) Calculator

✖Change in Option Premium refers to the fluctuation in the price of an options contract due to alterations in factors such as the underlying asset's price, implied volatility, or interest rates.ⓘ Change in Option Premium [ΔV]			+10% -10%
✖Change in Rate of Interest denotes fluctuations in the cost of borrowing money or the return on investments, impacting financial markets and asset valuations.ⓘ Change in Rate of Interest [Δr]			+10% -10%

✖Rho denotes the sensitivity of an option's price to changes in interest rates, indicating how much the option's value will change for a one percent change in interest rates.ⓘ Rho (Options Greek) [ρ]

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Formula

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Rho (Options Greek)

Formula

ρ = \frac{ΔV}{Δr}

Example

1.666667 = \frac{2.5}{1.5}

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Rho (Options Greek) Solution

STEP 0: Pre-Calculation Summary

Formula Used

Rho = Change in Option Premium/Change in Rate of Interest
ρ = ΔV/Δr
This formula uses 3 Variables

Variables Used

Rho - Rho denotes the sensitivity of an option's price to changes in interest rates, indicating how much the option's value will change for a one percent change in interest rates.
Change in Option Premium - Change in Option Premium refers to the fluctuation in the price of an options contract due to alterations in factors such as the underlying asset's price, implied volatility, or interest rates.
Change in Rate of Interest - Change in Rate of Interest denotes fluctuations in the cost of borrowing money or the return on investments, impacting financial markets and asset valuations.

STEP 1: Convert Input(s) to Base Unit

Change in Option Premium: 2.5 --> No Conversion Required
Change in Rate of Interest: 1.5 --> No Conversion Required

STEP 2: Evaluate Formula

Substituting Input Values in Formula

ρ = ΔV/Δr --> 2.5/1.5

Evaluating ... ...

ρ = 1.66666666666667

STEP 3: Convert Result to Output's Unit

1.66666666666667 --> No Conversion Required

FINAL ANSWER

1.66666666666667 ≈ 1.666667 <-- Rho

(Calculation completed in 00.004 seconds)

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Credits

Created by Keerthika Bathula

Indian Institute of Technology, Indian School of mines, Dhanbad (IIT ISM Dhanbad), Dhanbad

Keerthika Bathula has created this Calculator and 50+ more calculators!

Verified by Nayana Phulphagar

Institute of Chartered and Financial Analysts of India National college (ICFAI National College), HUBLI

Nayana Phulphagar has verified this Calculator and 1500+ more calculators!

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Rho (Options Greek) Formula

Rho = Change in Option Premium/Change in Rate of Interest
ρ = ΔV/Δr

What is Rho (Options Greek) ?

Rho, in options Greek, signifies the sensitivity of an option's price to changes in interest rates. It quantifies how much an option's value will change for a one percent increase or decrease in interest rates, assuming all other factors remain constant. Rho is particularly relevant in situations where interest rates are expected to fluctuate significantly, as it helps options traders and investors assess the impact of these changes on option prices. Understanding Rho enables market participants to make informed decisions about their options positions, especially in environments where interest rate movements can significantly affect the profitability and risk of options strategies.

How to Calculate Rho (Options Greek)?

Rho (Options Greek) calculator uses Rho = Change in Option Premium/Change in Rate of Interest to calculate the Rho, The Rho (Options Greek) denotes the sensitivity of an option's price to changes in interest rates, indicating how much the option's value will change for a one percent change in interest rates. Rho is denoted by ρ symbol.

How to calculate Rho (Options Greek) using this online calculator? To use this online calculator for Rho (Options Greek), enter Change in Option Premium (ΔV) & Change in Rate of Interest (Δr) and hit the calculate button. Here is how the Rho (Options Greek) calculation can be explained with given input values -> 1.666667 = 2.5/1.5.

FAQ

What is Rho (Options Greek)?

The Rho (Options Greek) denotes the sensitivity of an option's price to changes in interest rates, indicating how much the option's value will change for a one percent change in interest rates and is represented as ρ = ΔV/Δr or Rho = Change in Option Premium/Change in Rate of Interest. Change in Option Premium refers to the fluctuation in the price of an options contract due to alterations in factors such as the underlying asset's price, implied volatility, or interest rates & Change in Rate of Interest denotes fluctuations in the cost of borrowing money or the return on investments, impacting financial markets and asset valuations.

How to calculate Rho (Options Greek)?

The Rho (Options Greek) denotes the sensitivity of an option's price to changes in interest rates, indicating how much the option's value will change for a one percent change in interest rates is calculated using Rho = Change in Option Premium/Change in Rate of Interest. To calculate Rho (Options Greek), you need Change in Option Premium (ΔV) & Change in Rate of Interest (Δr). With our tool, you need to enter the respective value for Change in Option Premium & Change in Rate of Interest and hit the calculate button. You can also select the units (if any) for Input(s) and the Output as well.

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