Gamma measures the sensitivity of option delta to changes in the underlying price, and theta describes the time decay of the extrinsic value of the option.

These two Greeks typically have an inverse sign relationship, meaning that a contract with a positive gamma will often have negative theta and vice versa.

This relationship, often described as the gamma-theta tradeoff, presents both benefits and risks to the buyers and sellers of options contracts.

Tune in as Tom and Tony walk through this concept.