Glossary

Rho (ρ)

By Rohan Fernandes, Founder · Updated 2026-08-21 · Educational reference, not investment advice

Rho is the option's price change per one-percentage-point change in the risk-free rate. It is negligible for short-dated options and material for long-dated ones, where rate exposure compounds over years.

Calls gain from higher rates and puts lose, because the strike's present value falls as rates rise. For a 30-day spread the effect is noise; for a two-year LEAPS a full point of rate change moves the price meaningfully. This is why careful pricing engines fetch a Treasury yield curve and price each expiration with its own matching rate instead of one constant.

Educational reference. Options Scanner is a software tool. It is not a broker-dealer, an investment adviser, or a fiduciary, and nothing on this page is investment advice or a recommendation to buy or sell any security. Options involve risk and are not suitable for every investor; read the Characteristics and Risks of Standardized Options before trading. Examples use hypothetical numbers for illustration only.