What is definition of Gamma in stock trading?

Gamma is a term used in trading to assess the rate of change of the delta of an asset relative to the change in the price of the asset and is used to analyze the movement of derivatives relative to the underlying value.

A higher value of gamma usually makes a position harder to hedge, although a lower gamma usually means a lower alpha.

Be the first to comment!

You must login to comment

Related Posts

 
 
 

Loading