Trading the Slowdown in Interest Rates Hikes
The Federal Reserve is expected to stop hiking interest rates at some point in H1 2023—a development that will impact the underlying markets for stocks, bonds and options
Trading the Slowdown in Interest Rates Hikes
Options Trading: Why Some ‘Greeks’ Matter More Than Others
The Greeks provide investors and traders with insight on given options positions’ response to potential scenarios in the underlying stock, but some are arguably more important than others.
Why Rho Matters When Interest Rates are Moving
Rho measures the sensitivity of an option’s value to changes in interest rates and is in the spotlight because of the Federal Reserve’s aggressive plan to raise rates.
Volatility Risk: It’s All About the Vega
When implied volatility moves up and down a lot, as it has been in recent months, many traders and investors become more attuned to their portfolio’s exposure to vega. For those seeking to reduce their exposure to vega, a couple easy choices include closing open positions with high vega, or reducing them, as well as … Continued
Volatility and the Greeks
The last time the markets moved with this much pace was the 2008-2009 Financial Crisis, which occurred not long after the introduction of the first iPhone. That means many investors and traders active in the current environment have never before observed, or dealt with, such dynamic markets. In some ways, less-experienced traders possess advantages in … Continued
Time Decay, Theta & Toga Parties
Let’s talk Greeks—and no, there will be no reference to toga parties (sorry about the clickbait). Instead, the “Greek” we’ll cover is theta, aka time decay. Theta describes the declining value of an option as time passes, a critical component for anyone trading options. Specifically, theta reports how much an option theoretically decreases in value … Continued