Gamma hedging is a risk management strategy used to reduce the risk associated with the curvature of an option's price movement as the underlying asset's price changes. This technique involves adjusting a portfolio of options and their underlying assets in response to changes in the delta, which measures how much the price of an option changes when the price of the underlying asset changes. By implementing gamma hedging, traders aim to maintain a neutral position that protects against significant fluctuations in the market.
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