Definition of Gamma:
The third letter of the Greek alphabet (Γ, γ), transliterated as ‘g.’.
Rate at which the delta of an option changes in response to a change in the price of the underlying asset. Positive gamma indicates positive convexity of the trading position: an up or down move in the price of the underlying asset will give the position a value higher than that predicted by delta.
How to use Gamma in a sentence?
- In the Greek alphabet, each letter has a name that is not directly related to its sound value (alpha, beta, gamma, etc.), but this practice is not common in Roman derived alphabets.
Meaning of Gamma & Gamma Definition