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BONUS: Cem Karsan - Derivatives Are The Underlying

The Business Brew

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What's the Difference Between Gama and Delta?

If people are buying these out of the money, long dated calls, say, you're going to have less delta and more gama. Gama's the percentage of the option that increases for the next dollar move. And this is where we get these gama squeezes. One delta is like one percent of the contract. Roughton delta means point move in the stock, the price of that option moves one cent. So there's a reflexive, again, effect here on the tail that has high convexity,. You can force buy-and-sell game by buying market as it goes up, selling when it goes down.

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