July 14, 2020

### Discounting Factor

Rho of a call option Tags: options risk management valuation and pricing Description Formula for the calculation of the rho of a call option. Rho is an option value's sensitivity to a change of the risk-free interest rate.. Formula. Option Rho Rho is the change in option value that results from movements in interest rates. The value is represented as the change in theoretical price of the option for a 1 percentage point movement in the underlying interest rate. Expressed in decimals, calls and puts have differing values. For example a Rho of indicates the option’s theoretical value will increase by given a 1% increase in interest rates Long calls and short puts have positive rho • The interest rate differentialis very important when trading FX options.

### Interest Rates?

Expressed in decimals, calls and puts have differing values. For example a Rho of indicates the option’s theoretical value will increase by given a 1% increase in interest rates Long calls and short puts have positive rho • The interest rate differentialis very important when trading FX options. USD/ RMB(Renminbi) FX rate: Ticker Symbol: RHO: Exercise Style: European (exercisable on expiration date only) Contract Size: For the spot and the next monthly options, the highest and lowest strike prices should cover 2 percent above and below the base price. For the next 4 quarterly options, the highest and lowest strike prices should. Option Rho Rho is the change in option value that results from movements in interest rates. The value is represented as the change in theoretical price of the option for a 1 percentage point movement in the underlying interest rate.

### Cost of Carry

In finance, a foreign exchange option is a derivative financial instrument that gives the right but not the obligation to exchange money denominated in one currency into another currency at a pre-agreed exchange rate on a specified date. See Foreign exchange derivative. The foreign exchange options market is the deepest, largest and most liquid market for options of any kind. Most trading is over the . Fx options rho maxs 3 Comments In mathematical financethe Greeks are the quantities representing the sensitivity of the price of derivatives such as options to a change in underlying parameters on which the value of an instrument or portfolio of financial instruments is dependent. Expressed in decimals, calls and puts have differing values. For example a Rho of indicates the option’s theoretical value will increase by given a 1% increase in interest rates Long calls and short puts have positive rho • The interest rate differentialis very important when trading FX options.