Why Is High Gamma Undesirable for a Portfolio Manager Who Wants a Stable Hedge?

High Gamma means the Delta of the option changes rapidly with small movements in the underlying price. This rapid change forces the portfolio manager to frequently rebalance the hedge (adjusting the number of options or underlying assets) to maintain a Delta-neutral position.

This process, called "re-hedging," increases transaction costs and introduces complexity, making the hedge unstable.