The first syllable is stressed in the US
543 karma · joined October 5, 2016
There’s a Java VM on these things?!
I’m unclear on Zip’s business model so appreciate I could be missing something here.
A sample: "It had been a rough day, so when I walked into the party I was very chalant, despite my efforts to appear gruntled and consolate. I was furling my wieldy umbrella for the coat check when I saw her standing alone in a corner. She was a descript person, a woman in a state of total array."
Now that was easy to crack.
The retail investor gets long an option (let's say a put), and the dealer gets short that option. As the price goes down, the retail investor gets shorter (higher chance his put finishes in the money), whereas the dealer gets longer.
In general, retail investors don't hedge, whereas dealers do. As the stock price goes down, the dealer needs to sell stock to hedge and avoid getting net long the stock. Thus a gamma squeeze tends to exacerbate rather than mollify volatility.
Gamma is how much the delta changes for a change in the underlying stock (i.e., the second derivative w.r.t. the stock price).
Market makers hedge their options positions by buying or selling the underlying stock so that they have no exposure to moves in the underlying stock (they are "delta neutral"). So if the delta at the current stock price is 0.50 and the market maker is short 100 call options, he will buy 50 shares. But options are non-linear and the delta changes with the stock price (again, this is what gamma is). If the stock moves up so that the delta increases to 0.60, the market maker will need to buy another 10 shares so that he owns 60 shares and is again delta neutral.
In this way, buying begets more buying and this is what people mean when they talk about a gamma "meltup".
5) Surprising math:
int x = 0xfffe+0x0001;