How Does Gamma Behave for ATM Options? ⎊ Path

How Does Gamma Behave for ATM Options?

Gamma is typically highest for at-the-money (ATM) options. High gamma means the option's delta is most sensitive to changes in the underlying asset's price.

Since ATM options are on the cusp of moving ITM or OTM, their delta changes most rapidly with small price moves, leading to the highest gamma value.

Define “Gamma” in Options Trading and Its Relationship to the Underlying Asset’s Price Change

What Is the Typical Relationship between Theta and Delta for At-the-Money Options?

What Is the “Gamma” of an Option and Why Is It Highest for ATM Options?

How Does a “Zero-Day-to-Expiration” (0DTE) Option’s Delta Behave Compared to a Long-Dated Option?

Why Is Gamma Highest for At-the-Money Options near Expiration?

What Is the Relationship between Gamma and Theta?

Why Is Gamma Highest for ATM Options?

Why Is the Delta of an ATM Option Most Sensitive to Changes in Implied Volatility?

Glossar

ATM Options

Valuation ⎊ At-the-money (ATM) options, within cryptocurrency derivatives, represent contracts with a strike price approximating the underlying asset’s current market price, demanding precise pricing models given the volatility inherent in digital assets.