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What Is the Relationship between Theta and Gamma?

Inverse relationship: high gamma (high price sensitivity) typically corresponds to high negative theta (rapid time decay).
Greeks.Live23.11.25

What Is the Relationship between Theta and Gamma?

Theta and gamma have an inverse relationship, often described as the "theta-gamma trade-off." Options with high gamma (meaning high sensitivity to price change) tend to have high negative theta (meaning rapid time decay). This is because the option holder pays for the potential for large profits (high gamma) through the rapid loss of time value (high theta).

Why Is Theta Typically Negative for a Long Option?
How Does a ‘Greeks’ (Delta, Gamma, Vega, Theta, Rho) Measure Option Price Sensitivity?
How Does an Option’s Gamma Affect Its Theta Value?
Why Is Theta Typically Negative for a Long Option Position?

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