◈ GLOSSARY · TRADING & MARKETS
Gamma (Options Greek).
A definition, in plain English — with the books that teach it.
Reviewed by ClearValue Editorial Team · Jun 27, 2026
◈ DEFINITION
What it means
Definition
How much an option's delta changes for a $1 move in the underlying. Gamma is highest for at-the-money options near expiration, which is why short-dated ATM options can move violently on small price changes. High gamma is what makes weeklies feel like a slot machine — delta itself isn't stable.
◈ IN PRACTICE
Example
A call has a delta of 0.50 and a gamma of 0.10. The stock rises $1: delta becomes roughly 0.60. The stock rises another $1: delta is now around 0.70. The position gets more sensitive to price as it goes in your favor — and less sensitive as it goes against you.