: an informal form of a name. â Diminutives can be a shortened form of a name (such as âJenâ for âJenniferâ and âDickâ for âRichardâ) or a name with a diminutive suffix added to it (such as âBobbyâ for âBobâ).
The sensitivity of an option's market value relative to a change in the time to expiration. Theta is a measure of time decay and tends to grow larger as an option approaches expiration.
DEFINITION of 'Gamma'. The rate of change for delta with respect to the underlying asset's price. Gamma is an important measure of the convexity of a derivative's value, in relation to the underlying. In a delta-hedge strategy, gamma is sought to be reduced in order to maintain a hedge over a wider price range.A consequence of reducing gamma, however, is that alpha too will be reduced.amma is an important measure of the convexity of a derivative's value, in relation to the underlying. In a delta-hedge strategy, gamma is sought to be reduced in order to maintain a hedge over a wider price range.