Gamma

The rate at which delta itself changes as the stock moves — high gamma means delta shifts quickly.

Gamma tells you how fast an option's delta will change as the underlying stock moves. If delta is your speed, gamma is your acceleration. An option with a delta of 0.50 and a gamma of 0.05 will see its delta climb to roughly 0.55 after the stock rises one dollar, so your directional exposure keeps growing the more the trade works in your favour.

Gamma is highest for at-the-money options near expiry and much lower for deep in-the-money or far out-of-the-money contracts. Long option holders love this: a small move can suddenly turn a slow-moving position into a fast one. Sellers face the opposite, since a sharp move against a short strike can pile up losses quickly.

A common mistake is judging risk only by today's delta. Right before expiration, gamma explodes, and a stock hovering near the strike can flip your delta between 0 and 1 within hours. If you sell options for the theta, remember you are also short gamma, and one gap on earnings day can wipe out weeks of premium collected.

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Call Put Strike price Premium Expiration In the money (ITM)At the money (ATM)Out of the money (OTM)Intrinsic value Time value (extrinsic)Delta Theta Vega Implied volatility (IV)Open interest Assignment Exercise Spread Break-even Probability of profit (POP)Assignment risk / early assignment LEAPS Naked (uncovered) option Rho Historical volatility (HV)Volume Bid-ask spread Moneyness Covered call Cash-secured put Vertical spread Iron condor Straddle Strangle Rolling Margin Max pain American-style option European-style option Contract multiplier Debit vs credit Volatility skew The Greeks Underlying Hedge Leverage Expected move Notional value Protective put Collar Butterfly spread Iron butterfly Calendar spread Diagonal spread Credit spread Debit spread Bull call spread Bear put spread Ratio spread Synthetic position The wheel strategy Poor man’s covered call (PMCC)Box spread Put-call parity Pin risk IV crush IV rank / IV percentile Ex-dividend date Deep in the money Weeklys 0DTE (zero days to expiration)Order types (to open / to close)Buying power reduction Cash settlement Market maker Slippage Mid price Black-Scholes model

Educational use only. Quotes are delayed ~15 minutes and nothing here is financial advice. Options trading involves substantial risk of loss.