Skills Proficiency - Speed

To know how to USE Gamma hedging flows to our advantage, we need to have a basic grasp of HOW gamma changes throughout a dealer's position.

There are TWO Greeks to know:

1. Speed
2. Color

This video covers SPEED, or "dgamma/dspot"

This Greek behaves like a street sign on your dealer map.

Without getting overly technical- SPEED describes how dealer gamma hedging flows will be *changing* as spot price moves around.

Importantly- high positive speed ranges will naturally produce dealer hedging flows that act as "resistance" to the market, while large negative speed ranges will be like "cushions" for the market when it sells off.

Watch this video and learn how to use SPEED to your advantage when anticipating flow imbalances AND choosing long or short strikes for your trades.

‍