What is gamma risk and why does it become dangerous in 1DTE iron condors near a short strike?

Gamma is the rate of change of delta. A high-gamma option's delta moves rapidly in response to underlying price changes. Options closest to expiration and closest to being at-the-money have the highest gamma.

For 1DTE iron condors, gamma is the primary late-day risk. As SPX approaches a short strike in the final hours before expiration, gamma accelerates dramatically. An option that started with delta 0.10 can rapidly reach delta 0.50 or higher as the underlying moves through your short strike. This creates a scenario where losses compound quickly — the position goes from slight discomfort to significant loss in a short time period.

The practical response: establish clear exit rules based on underlying price levels (not P&L). If SPX reaches within a defined distance of your short strike (often 5–10 points depending on the condor width), that is your pre-defined exit trigger. Do not wait for the option to go fully in-the-money before acting. Pre-defined rules prevent the paralysis that gamma acceleration causes.

RSAi™ accounts for end-of-day gamma risk in its strike recommendations by considering the probability distribution specifically for the final hours of trading, not just the full-day expected range.