Gamma option is the change in delta with respect to the stock's underlying price. It's used to try and find a price of an option in or out of money, commonly used within an options trading system.
When the option being measured is deep in or out of the money, gamma is small. When the option is near the money, gamma is largest.
Related terms: Butterfly Options Spread, Straddle, Strangle, Delta, Theta, Vega