Gamma is larger when there is uncertainty whether is will expire in or out of the money. True or False and why.
True. That would mean that you are at the money, which is where gamma is at it’s largest.
True. The greater the uncertainty that it will expire in the money.
True because you can fall either ways, i.e. you are ATM Gamma - MAX at ATM
Where ya been dinesh?
yes. and that is when stock price is equal to X-aka the exercise price. because then if the stock moves in the right direction, the option price increases the most(talking about a call right now) that means delta increases the most… leading to a higher gamma
Weird question, but I would say true because it is probably the most uncertain if it is currently at the money, which is when gamma is at its peak.
yep, what the above said, and it reflects the sensitivity of delta which is very jumpy at the money.
mwvt9 Wrote: ------------------------------------------------------- > Where ya been dinesh? Feeling damm low… never seen a failure so close to my eyes. Sorry don’t want to start the negativity, but the fact remains…
That was a bunch of very fast replies
and by the way this is the portion where the dinamic hedging is less effective.
I used to have problems thinking about gamma until I started picturing the payoff curve of the option and seeing gamma as the slope.
yes it was, and dinesh, there is no reason for that attitude, you and mwvt got this cold, right now we need to keep zims on board.
Black Swan Wrote: ------------------------------------------------------- > yes it was, and dinesh, there is no reason for > that attitude, you and mwvt got this cold, right > now we need to keep zims on board. I threw up a 53% on sample 2 yesterday. The only thing that was cold was my dead body after all that red.
Great. I knew Gamma was largest at the money but was confused by the wording.
I saw that mwvt, but alot of very strongly prepared people scored similarly, the idea of you and dinesh not passing is just rediculous, I am confident in that, and I’m not a mindlessly optimistic type.
mwvt9 Wrote: ------------------------------------------------------- > I used to have problems thinking about gamma until > I started picturing the payoff curve of the option > and seeing gamma as the slope. I think you meant delta as the slope. Gamma will be the slope for delta curve.
I am taking sample 3 tomorrow and if I see that much red again I will defenestrate my monitor.
kabhii Wrote: ------------------------------------------------------- > mwvt9 Wrote: > -------------------------------------------------- > ----- > > I used to have problems thinking about gamma > until > > I started picturing the payoff curve of the > option > > and seeing gamma as the slope. > > I think you meant delta as the slope. Gamma will > be the slope for delta curve. That is right kabhii. I meant delta. Then to picture gamma I think of how the slope would be changing as you slide up and down the payoff curve.
no idea what that word means, will look it up tomorrow when not on the iPhone.