Gamma Neutral
Categories: Derivatives, Trading
Let's replace the word "gamma" with the word "odor" for a second. So, odor neutral. You were smelling bad....odor negative. Then you added some deodorant. Now you're odor neutral.
Add a little perfume or cologne, and you become odor positive. (Too much perfume or cologne and you're back to odor negative, but that's a different story.)
Back to gamma. You have a position in the options market that has too much gamma. So you offset it. You put in a gamma hedge. That gets you back to gamma neutral.
See: Gamma Hedge