What is Theta in Options?

An option’s contract value is always a combination of instinct and extinct value. Both of these components have their valuation calculations.   The first component of the option’s price, i.e., intrinsic value, refers to the contract’s moneyness (this term is used to describe whether the contract is in the money, out of the money, or at …

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What is Gamma in Trading

In options trading, the term Gamma represents the rate of change in the option’s Delta. Similarly, the term Delta measures the rate of change in an options price with respect to the underlying asset.  But where does Gamma come from, how is it used in underlying stocks, and Gamma’s hedging strategy? Read this post to …

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What is a Gamma Squeeze?

In the investing world, squeeze indicates the number of times investors were forced to make a change in their investing position due to rapid price movement in the company’s stock.  When the investors are forced to make changes, it results in price changes and forced moves. It further creates a nasty feedback loop, which can …

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