What is Vega & Rho in options?

There are 5 Common Greek Letter Indicators for Options:

What is Delta in Options?

What is Gamma in Options?

What is Theta in Options?

This post will explain vega & rho in options. 

Vega reflects the effect of volatility on changes in option prices. For every 1% change in volatility, the option price changes by approximately 1 vega.

Rho reflects the impact of the risk-free interest rate on changes in option prices. For every 1% change in the risk-free rate, the option price changes by 1 approximately rho.

When introducing the implied volatility, it was mentioned that the implied volatility has a great influence on the option price, and the impact of the implied volatility on the option price can be quantified through vega.

Rho is used to measure the impact of the risk-free interest rate on changes in futures prices. Usually, the risk-free interest rate fluctuates less because it has less impact on option prices.

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Disclaimer: Investing carries risk. This is not financial advice. The above content should not be regarded as an offer, recommendation, or solicitation on acquiring or disposing of any financial products, any associated discussions, comments, or posts by author or other users should not be considered as such either. It is solely for general information purpose only, which does not consider your own investment objectives, financial situations or needs. TTM assumes no responsibility or warranty for the accuracy and completeness of the information, investors should do their own research and may seek professional advice before investing.

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  • Kyesu
    ·2022-03-05
    Thank you for the sharing. Like
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  • fluffik
    ·2022-03-05
    The information you provided is very useful to me. Thank you for sharing.
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  • RoaringTiger
    ·2022-03-07
    Thank you for the short and concise explanation. Learned more about options today
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  • choonhong1
    ·2022-04-04
    Great ariticle, would you like to share it?
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    • TAILO
      l
      2022-09-20
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  • 嘛嘛财商FQ
    ·2022-03-06
    [财迷] [财迷] [财迷] [财迷]
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  • JaneLeon
    ·2022-03-05
    thanks for the guidance and info. keep it up
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  • Judetjwben
    ·2022-03-05
    Like and comment
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  • Kw1878
    ·2022-03-05
    Thanks for sharing
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  • NeedMoneyPls
    ·2022-03-04
    do write about IV Crush next
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  • BooBoo789
    ·2022-03-04
    Interesting [Miser]
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  • 🤔interesting subject👏
    Like❗️Like❗️Like❗️
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  • tcwdoggy
    ·2022-03-05
    I shall like my own comment
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  • OpenSesame88
    ·2022-03-05
    thanks for the info
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  • kyawkh
    ·2022-03-05
    [Happy] [Happy] [Happy]
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  • jipbu
    ·2022-03-05

    [Like] 

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  • Linearity
    ·2022-03-05
    Gd to know
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  • Jel_tan
    ·2022-06-22
    Ok
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  • Jeff Ng
    ·2022-04-29
    Good
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  • wendy32
    ·2022-04-21
    💕
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  • Kent0525
    ·2022-04-21
    hi
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