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Comment by ryandrake | Hacker News Reader

Whenever I read about a topic that I don't know much about, part of me is always wondering if the writer is throwing all these exotic words and greek letters in there because they are really an essential to understanding the topic, or because they just want to over-complicate it to sound smart and blow their own horn.

On one hand we have Occam's Razor: "the simplest solution is almost always the best." On the other we have "For every complex problem there is an answer that is clear, simple, and wrong." How does one know which to apply?

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I don’t know how you could possibly reason about options without understanding delta, and gamma makes sense to me too since it’s just the derivative of delta as the underlying value changes.

As a math person, I’ve never heard “gamma” to mean the derivative of a change (a delta). For example, I was always taught that speed is v=delta-x/delta-t (distance over time). I’ve never heard gamma to mean that.

Speaking as a math major, gamma means, like, a million different things. It’s just a letter. There are only 26 latin letters, 24 greek letters, the capitals, and then a few oddities like blackboard bold, fraktur, cursive, etc. You run out pretty quickly and end up reusing letters.

Just like pi means different things in different contexts. It might be a permutation, projection, a function which counts prime numbers, or it might be half the period of sin. I might write π(10) = 4, or π ≈ 3.14…, or for π in P, etc. I might say that π is the right inverse of ι, in other words π∘ι = id, and point to some digram with a bunch of arrows.

Delta is not just “a change” in this context. It is specifically the rate of change of an option’s value with respect to the value of the underlying security. Just like pi, delta and gamma mean different things in different contexts.

Referring to https://en.wikipedia.org/wiki/Greeks_(finance)?wprov=sfti1

Financial markets and derivatives are just complicated.

There seem to be a lot of moving parts, and a lot of possible outcomes.

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