Gamma

Gamma is a measure used in options trading to indicate how much the delta (the sensitivity of an option's price to the underlying asset's price) changes when the asset's price moves. In simple terms, gamma shows how quickly the rate of change (delta) of an option's price adjusts in response to market movements. A high gamma means the option's price is more sensitive to small moves in the underlying asset, making it more dynamic in changing market conditions. Traders use gamma to assess the stability and risk of their options positions, especially for managing how their strategies evolve as prices fluctuate.