To The Moon

In options trading, most people know that Delta measures how sensitive an option’s price is to changes in the underlying asset. 🤔

But why does Delta itself sometimes “jump” sharply? That’s where Gamma comes in.

📖 Let’s see how The Options Handbook explains Gamma:

▶ Gamma shows how fast Delta changes ⏱️

If Gamma is high, even a small move in the stock price can cause Delta to shift significantly—making the option’s price swing sharply.

Example: In this $NVIDIA(NVDA)$ option, Gamma is 0.062, meaning that for every $1 move in the stock, Delta changes by about 6%.

▶ Which options have high Gamma? 🧐

• At the Money (ATM): Usually the highest Gamma, most sensitive to price moves.

• In the Money (ITM) / Out of the Money (OTM): Lower Gamma, with milder reactions.

▶ Practical use ⚡

• For short-term trades or betting on explosive moves: pick high-Gamma options—they move fast and offer strong leverage.

• For longer-term positions or option-selling strategies: choose low-Gamma options—steadier and less volatile.

🎁 Want more insights like this? The Options Handbook also dives deeper into the other Greeks—helping you build a full picture of how options really work! Now available in the Tiger Coin Center! 🐯🛒

>> Redeem Options Handbook Now <<

>> Click here for the Simplified Chinese version <<