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G

Gamma

The measure of change in the delta of an option compared with a price change in the underlying. See Delta.

 

Gann analysis

Analysis of market movements by drawing trendlines from prominent market price tops or bottoms at certain specific angles. The most important line is the 45 degree line based on a one to one relationship between units of time and price which means prices rise or fall at the rate of one price unit per time unit. Channel lines may also be drawn. In an uptrend Gann lines offer support and, in a downtrend, resistance is noted.

 

Gap theory

Examines the causes of movements in price graphs based on technical analysis.

 

Gilt-Edged Market Maker (GEMM)

A market maker in UK government bonds.

 

General Clearing Members (GCM)

Members who are entitled to clear LIFFE transactions made for their own account and for clients. They may also clear transactions made by a non-clearing member under the terms of a standard clearing agreement.

 

Gilt

Domestic sterling-denominated bond backed by the full faith and credit of the United Kingdom and issued by the UK Treasury.

H

Hedge efficiency

The success of a hedging transaction in reducing risk exposure.

 

Hedging

Reducing the risk of a cash position in the futures instrument to offset the price movement of the cash asset. A broader definition of hedging includes using futures as a temporary substitute for the cash position.