Options Crash Course

Options Crash Course: Ep #7 - Gamma: Sign, Magnitude, and Risk

Options Crash Course

Options involve risk and are not suitable for all investors. Please read Characteristics and Risks of Standardized Options before deciding to invest in options.

In today’s episode of Tastytrade’s Options Crash Course, we dive headfirst into gamma, or delta’s change as stock prices change. With gamma, arguably the most confusing of all the Greeks we use to actively monitor our portfolios, it’s important to recognize what is important and what is not.

While the sign of gamma is critically important for us to understand our positions, the actual magnitude of gamma is far less important. As we manage our positions at 21 DTE, we’re naturally able to control any gamma risk that might otherwise be associated with our positions.

LINKS TO ALL CRASH COURSE EPISODES:

Ep #1: The Source of all Strategies

Ep #2: Deconstructing Option Prices

Ep #3: Extrinsic Value Extras

Ep #4: Profit, Direction, and Probability

Ep #5: The Natural Decay of Options

Ep #6: Trading Changes in Implied Volatility

Ep #7: Gamma: Sign, Magnitude, and Risk

Ep #8: Contracts, Decay, and IV Overstatement

Ep #9: Defined-Risk Strategies: Part One

Ep #10: Defined-Risk Strategies: Part Two

Ep #11: Undefined-Risk Strategies: Part One

Ep #12: Undefined-Risk Strategies: Part Two

Ep #13: Managing Winners, Losers, and Rolling

Ep #14: Directional Bias at the Portfolio Level

Ep #15: Positive Theta at the Portfolio Level

Ep #16: Putting it all Together: Trade Entry and Exit

Ep #17: Putting it all Together: Trade Management

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