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Options Volume vs Open Interest Explained

Trading volume and open interest are two parameters used to describe activity and liquidity in the options market. Trading volume measures the number of options contracts traded during a specified period and open interest measures of the number of open option contracts in the market at any time.

Puts and Calls: Stock Options Explained

Options are derivatives that allow investors to exchange the right to buy or sell a specific security at a specific price. We've seen before exactly what options are, how they work and their function. Here we go further and explore the two main flavour of options (at those traded on the open market): puts and calls.

Options Rho: Sensitivity To Interest Rates

Rho is the sensitivity of an options's price to changes in interest rates. It is usually only worth considering for long dated options such as LEAPS. Rho is the least important of the five major Greek metrics. In fact, it is often overlooked entirely when talking about options.

Options Theta Explained: Price Sensitivity To Time

Options theta measures option price sensitivity to time. All things being equal options lose value over time - so called 'time decay' - and theta measures this decay. In other words, an option premium that is not intrinsic value will decline at an increasing rate as expiration nears. 

Options Delta Explained: Sensitivity To Price

Options Delta is the measure of an option’s price sensitivity to the underlying stock or security’s market price. It is the expected change in options price with a 1c change in security price (positive if it rises/falls with a rise/fall in market price; negative otherwise).

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