Options Color: Managing Gamma Decay and Expiration Pin Risk
ยท 3 min read
In the final hours and days of an option's life, the Greeks behave in ways that can baffle even experienced traders. While Theta measures the erosion of an option's price over time, Color measures the erosion of its Gamma. To master the dynamics of 0DTE (Zero Day to Expiration) and institutional hedging, understanding Color is essential.