Gamma

[satogaeru]

This is a pretty trivial question but it's bugging me.

In the Derivatives Markets book, it looks like there are two gammas used. One (in chapter 11) is "gamma, the required rate of return." The other (in chapter 12) is the gamma, the option Greek that reflects the change in delta as the stock price increases.

In the FE world, is there a conventional way to distinguish between these two gammas, other than by context? When it uses the Greek letters, the book uses lowercase gamma for the first and capital gamma for the second, but often it just says "gamma" without using the Greek letter.

[Abraham Weishaus]

Any reason this bothers you more than the 2 deltas?

I don't think the notation for interest rates (continuous dividend rate, continuous return rate for an option) is standard. Only the Greeks in chapter 12 are standard.

[satogaeru]

Originally Posted by Abraham Weishaus

Any reason this bothers you more than the 2 deltas?

Heh. Probably because I haven't noticed the two deltas yet.

Anyhow, thank you for the information on the standardness/nonstandardness of the notation. Even the Greeks seem to be a little less standard than I'd like. For example, I noticed some sites don't list the option Greek psi, but do list other option Greeks not covered in the McDonald text.

e.g.
http://en.wikipedia.org/wiki/The_Greeks - no psi, some other Greeks
http://www.asx.com.au/investor/options/greeks.htm - no psi

Everything seemed to be making sense through chapter 11 but I think I'm going to need supplementary material to place the chapter 12 material into context.

[satogaeru]

Originally Posted by satogaeru

Heh. Probably because I haven't noticed the two deltas yet.

*smacks forehead*

Oh, wait. Those two deltas. Hmm, nope, those don't bother me a bit.