A 60-second explainer

Gamma is how fast an option starts acting like the stock.

Delta is “how much.” Gamma is “how fast that amount changes.” Move the stock. Watch the hill.

Play with it

One call. Strike is $100. You only change the stock price and how soon it expires.

Stock price $100

Delta

0.50

Gamma

0.04

Why dealers care

You bought a call. Someone sold it to you. That someone is often a market maker.
To stay neutral they hedge by buying or selling the stock as delta changes.
When they are short gamma, a rising stock forces them to buy, and a falling stock forces them to sell. They chase.
That chase can amplify a move. The hill is not decoration — it is where the chase gets expensive.

Gamma squeeze, one paragraph

A gamma squeeze is that chase getting crowded. Lots of short-gamma dealers, price starts running, they all buy at once, price runs more. GameStop in 2021 is the famous one. It is not a button you press. It is a crowd getting stuck on the steep part of the hill.

See it on live Bitcoin

This page is a toy with one strike. AnalogQuant maps live gamma terrain on short-term BTC — paper, no account required.

Open AnalogQuant →