How Does the High Gamma of Short-Dated Options Affect the Effectiveness of a Static Hedge?

The high Gamma of short-dated options severely reduces the effectiveness of a static hedge. A static hedge is one that is set up once and not adjusted.

Since high Gamma causes the Delta to change rapidly with price movements, the initial hedge ratio quickly becomes inaccurate, leaving the position exposed to directional risk. An effective hedge for high-Gamma options requires frequent, dynamic adjustments.