Easy Gamma Q change, correct, measures, function, effective

fishmarket

When an option’s gamma is higher:

A) a delta hedge will perform more poorly over time.

B) delta will be higher.

C) a delta hedge will be more effective.






The correct answer was A.

Gamma measures the rate of change of delta (a high gamma could mean that delta will be higher or lower) as the asset price changes and, graphically, is the curvature of the option price as a function of the stock price. Delta measures the slope of the function at a point. The greater gamma is (the more delta changes as the asset price changes), the worse a delta hedge will perform over time.


Two questions on the explanation:
1) Isn't gamma the curvature of the DELTA, not option price, as a function of the stock price?
2) Is the gamma of a call and put on the same stock with same exercise price and same time to maturity the same?