Gamma
Gamma is the sensitivity of delta to the underlying — how fast the hedge ratio moves, and who is chasing whom.
Definition
Gamma refers to how fast the hedge ratio moves, and who is chasing whom. Keep that definition fixed when comparing series, managers, or regimes — renaming the same tape does not create a new signal.
Why it matters
Options and futures embed views on vol, skew, and path that cash markets only hint at. When how fast the hedge ratio moves, and who is chasing whom shifts, related hedges, limits, and narratives usually need an explicit update rather than a quiet assumption.
Case
Suppose a desk is positioned for the opposite of what gamma is saying. If how fast the hedge ratio moves, and who is chasing whom moves against that book, the first question is not “is the story clever?” but whether size, hedges, and stop logic still match the observation.
How to read it
State the expiry and Greek exposure; unmarked vol or pinning effects rewrite the thesis. Prefer a short written null hypothesis for Gamma: what would falsify the current reading in the next window?