Gamma

Gamma is an options risk measure, one of the Greeks, expressing how fast an option's delta changes as the underlying asset's price moves. If an option has a delta of 0.50 and a gamma of 0.05, a one point rise in the underlying lifts delta to roughly 0.55. Gamma is highest for options near their strike price and close to expiry.

Why it matters

Gamma is where options stop behaving like linear bets and start bending. Buyers of options hold positive gamma: their exposure automatically grows in their favor as the market moves, which is why long options profit from turbulence. Sellers hold negative gamma and must hedge by trading with the market's direction, buying as prices rise and selling as they fall. When dealers across a market share the same negative gamma position, that hedging amplifies moves, a dynamic blamed for flash rallies and crashes in equities and famously visible in bitcoin's options market around large expiries on venues such as Deribit, where dealer hedging flows can pin or propel the spot price near heavily traded strikes.

In the gold vs bitcoin debate

Both assets now carry deep options markets, gold through COMEX and bitcoin through offshore venues and, since late 2024, options on the United States spot ETFs. That maturation cuts both ways: options give holders tools to hedge and earn yield, while embedding each asset ever deeper in the derivative dynamics, including gamma driven volatility, that hard money advocates originally hoped to escape. The bearer asset itself has no gamma; only the claims built on top of it do.