Why Is Gamma Highest for ATM Options? ⎊ Path

Why Is Gamma Highest for ATM Options?

Gamma is highest for At-the-Money (ATM) options because their Delta is most sensitive to changes in the underlying price at this point. An ATM option is at the inflection point where a small move can quickly push its Delta towards 1 (ITM) or 0 (OTM).

This rapid change in Delta means the option's price sensitivity is accelerating fastest, which is the definition of high Gamma.

Does Vanna Tend to Be Highest for ATM or OTM Options?

Which Moneyness Category (ITM, ATM, OTM) Typically Has the Highest Gamma?

Explain the Inverse Relationship between Theta and Gamma

What Is the Significance of Gamma in Options Trading, Especially for an At-The-Money Option like One with Delta -0.5?

Which of the Three States (ITM, ATM, OTM) Has the Highest Time Value Component?

What Is the Relationship between Gamma and Time to Expiration?

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

Why Does an At-The-Money (ATM) Option Have the Highest Time Value?