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Option gamma indicates how an option position’s delta will change as the stock price changes.
In this video, you’ll learn:
1. What is long/positive gamma?
2. What is short/negative gamma?
3. What does long gamma tell you about long calls and long puts?
4. What does short gamma tell you about short calls and short puts?
To support these points, you’ll see visual examples of long and short gamma applied to real call and put options:
1. How long call and long put deltas change relative to the stock price (as a function of their positive gamma)
2. How short call and short put deltas change relative to the stock price (as a function of their negative gamma)
Long & Short Gamma Explained:
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