Use "rho" in a sentence
rho example sentences
rho
1. He is the author of the bestselling Kindle series – The Rho Agenda
2. If X = –Y, so that the two variables are totally dependent, the correlation coefficient, usually represented in symbols by the Greek letter ρ (rho) will be −1
3. The sensitivity of an option’s theoretical value to a change in interest rates is given by its rho (P), usually expressed as the change in theoretical value for each one percentage point change in interest rates
4. Unlike the other sensitivities, one cannot generalize about the rho because its characteristics depend on the type of underlying instrument and the settlement procedure for the options
5. For this reason, the rho is usually considered less critical than the delta, gamma, theta, or vega
6. Indeed, few individual traders worry about the rho
7. Because of its relatively minor importance, in most examples, we will disregard the rho in analyzing option strategies and managing risk
8. We know that the delta of an underlying contract is always 100, but what is the gamma, theta, vega, and rho of an underlying contract? The gamma is the rate of change in the delta with respect to movement in the underlying contract
9. And finally, changes in interest rates do not affect the value of an underlying contract, so the rho must also be 0
10. Figure 7-14 shows several different positions with the total delta, gamma, theta, vega, and rho for each position
11. The last risk measure for Position 1 is the rho of –1
12. It should not come as a surprise that rho is negative because the long stock position will inevitably dominate the cash flow, resulting in a debit
13. The delta, gamma, theta, vega, and rho enable him to identify risk; they do not eliminate risk
14. In an option market, we might create a spread by taking a long gamma position in one option and a short gamma position in a different option, or by taking a long vega position and a short vega position, or even a long and short rho position
15. And the rho spread will be sensitive to changes in interest rates
16. A long call calendar spread in the stock option market must therefore have a positive rho, and a short call calendar spread must have a negative rho
17. A long put calendar spread in the stock option market must therefore have a negative rho, and a short put calendar spread must have a positive rho
18. Figure 11-31 is an evaluation table with the theoretical value, delta, gamma, theta, vega, and rho of several different options
19. Following this table are examples of volatility spreads of the types discussed in this chapter, along with their total delta, gamma, theta, vega, and rho
20. (Although the examples in Figure 11-31 assume that the underlying is stock, except for the rho, the characteristics of each type of spread will tend to be the same for options on futures
21. We can measure the risk of changing interest rates by determining the total rho value for each spread
22. The call spreads (Spreads 7 and 9) have a positive rho and negative dividend sensitivity
23. The put spreads (Spreads 8 and 10) have a negative rho and positive dividend sensitivity
24. This is reflected in their rho values
25. In the stock option market, a conversion has a negative rho, indicating a desire for interest rates to fall
26. A reverse conversion has a positive rho, indicating a desire for interest rates to rise
27. This is logical when we recall that in the stock option market calls have positive rho values and puts have negative rho values
28. In a conversion or reverse conversion, the signs of the call and the put rho positions will be the same, either both positive or both negative, because we are buying one option and selling the other
29. There is no sensitivity measure for dividends, but we can confirm that the put is relatively insensitive to changes in interest rates by noting that an out-of-the-money option has a small rho value compared with an in-the-money option
30. It would be convenient if we could use the same simple arithmetic to calculate the vega and rho that we used to calculate the delta, gamma, and theta
31. To determine the rho, we must change the interest-rate input
32. This may mean limiting the size of his position with respect to the various risk parameters—delta, gamma, theta, vega, and rho
33. The total rho of +12
34. , delta, gamma, theta, vega, and rho), thereby preparing to take protective action when market conditions move against him
35. Such options will have the greatest interest-rate sensitivity, as reflected by their high rho values
36. Figure 23-2 shows the effect on rho values for stock options as we increase time to expiration
37. Rho (P) The sensitivity of an option’s theoretical value to a change in interest rates
38. For the professional, this sensitivity is called rho, and you can calculate rho for your option, option spread, or option combination at www
39. That drives up demand for Call options, which causes premiums to rise slightly, which is measured by Rho
40. In my experience, the effect of Rho is so small, especially when trading options only a month or two before expiration, that it can generally be ignored
41. If I can ignore Rho, it is one less thing to think about
42. I will ignore Rho, and I will pay close attention to my options around ex-dividend dates
43. Liquidity is often more important than Theta, Vega, Rho, and dividends combined
44. Some Greeks, such as theta and rho, are additive for options pertaining to different underlying assets
45. The Greeks (vega, gamma, delta, rho, theta)
46. Rho expresses the sensitivity of the option price to changes in the interest rate
47. Some risk indicators, such as theta and rho, are additive
