MTM Options Trader Newsletter - Rho: It’s Back!

[image]( [image] This Week in the Market Market volatility continued last week and the chances of it ending this week are slim to none. Traders and investors have been left shaking their heads at times and it is anyone’s guess what will happen this week. Clearly at least a non-bullish outlook on the market needs to be maintained until some resistance levels have been broken. Currently both the 50-day and 200-day moving averages are well above the Dow, Nasdaq and S&P 500 indexes. The S&P 500 Volatility Index (VIX) is way up with option prices inflated, but it is up at some potential resistance. Is a reversal and move higher in the market imminent this week? We’ll have to wait and see. It is a slow week as far as quarterly earnings go with only a handful of big-name stocks reporting. One stock expected to announce this week that investors may be watching is Disney. The company has been in the news nonstop and the stock has continued to drop. It is a slower week than last week as far as economic reports go, but several worth noting are listed below. Remember, do not force or chase trades. There is nothing wrong with doing nothing and sitting on your hands. If you force a trade, the likelihood of losing money is overwhelming. Have a safe, healthy and prosperous week! May 9: Wholesale Inventories May 10: Household Debt May 11: Consumer Price Index May 12: Jobless Claims May 12: Producer Price Index May 13: Import Price Index [Read Our Blog]() Rho: It's Back! I haven’t had to think about this one for a while. But after 14 years, it’s back in play: the option Greek rho. The Option Greek Rho Let’s just dig right in, shall we? Rho is the option Greek that measures an option position’s sensitivity to a change in interest rates. It works like some of the other Greeks (theta and vega) measuring the option-value sensitivity in dollars and cents of option premium. For example, if an option has a rho value of 0.35 and interest rates change by 1%, the option value changes by 35 cents. Calls have positive rho, when you’re long them anyway, and long puts have negative rho. [Continue Reading ...]( MTM Watchlist Here area several trade ideas we may be analyzing in group coaching class this week: MCD – The stock has showed relative strength or at least a neutral pattern as the market has sold off. Continued bull put spreads will be considered below the moving averages. SPY – We have been modeling out bear call spreads lately as the market struggles to move higher. More of the same is on tap for this week. PYPL – The stock has shown no real signs of rallying as it keeps moving lower. A bounce could occur soon, but the stock looks destined to continue to drop. A longer expiration bear put spread will be explored. [image] We're honored to have Dan's Book Trading Option Greeks listed as one of the [Best Options Trading Books]() by New Trader U. [Buy Now on Amazon](=) The strategies in this newsletter are for educational and informative purposes only. All information disclosed in this newsletter should not be considered complete in its entirety. Market Taker Mentoring, Inc. will not be held responsible for changes, oversights, errors or omissions. Dates, prices, news and other information may not be accurate. Please verify all information before trading. You alone are responsible for your own investment decisions. Options involve risk and are not suitable for all investors. Before trading options, please read Characteristics and Risks of Standardized Option (ODD), which can be obtained from your broker; by calling (888) OPTIONS; or from The Options Clearing Corp., 125 S. Franklin St., Suite 1200, Chicago, IL 60606. No statement in this newsletter is intended to be a recommendation or solicitation to buy or sell any security or to provide investment or trading advice. Traders and investors considering options should consult a professional tax advisor as to how taxes may affect the outcome of contemplated options transactions. Copyright Market Taker Mentoring, Inc. 2008 - 2022. All rights reserved. Reproducing or redistributing this content is a violation of federal law. [image] If you do not wish to be contacted via email, you can unsubscribe using this link: [Unsubscribe]( Unsubscribing from email notifications DOES NOT cancel your class, subscription or recurring payments. We recommend that current students do not unsubscribe from email notifications. If you unsubscribe from email notifications, you will not be notified on how to access the classes or subscriptions in which you are enrolled. Market Taker Mentoring, Inc. PO Box 117 Frankfort, Illinois 60423 United States