INVESTING EXPLAINED: Understanding Gamma in Investment
In this series, we simplify the terminology and explain a popular investment concept. Today, we focus on Gamma.
Concerns: An increase in volatility is often a sign that confidence in the outlook for share prices is waning, as investors turn fearful
A Term from Another Dimension?
Not quite. Gamma, a metric in the options market named after the third letter of the Greek alphabet, measures share price volatility. This term has been gaining prominence in stock market reports, indicating concerns that the unexpected growth of Wall Street in recent times may be slowing down. Increased volatility is often an indicator of decreasing confidence in share prices, leading to investor fear.
As a result, analysts from major banks and brokers are closely examining the gamma positions of option traders.
A Recap: What are Options?
Options are financial derivatives that allow investors to buy (call option) or sell (put option)
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Denial of responsibility! Vigour Times is an automatic aggregator of Global media. In each content, the hyperlink to the primary source is specified. All trademarks belong to their rightful owners, and all materials to their authors. For any complaint, please reach us at – [email protected]. We will take necessary action within 24 hours.
