I know the basics about options greeks, but I heard traders extrapolating the concept to portfolios composed not just of options.
Providing liquidity on Uniswap, an automated market maker (AMM) built on top of the Ethereum blockchain, is said to have negative gamma. The capital deployed would be "impermanently lost" as per the following function:
Uniswap charges a trading fee of 30 bips, so a liquidity provider would make up the loss when there's a lot of volume on the exchange.
Why can you refer to this investment strategy as being "negative gamma"? Is it because volatility harms your portfolio - i.e. concavity?
As per Argyll's comment, I'm adding more details about providing liquidity on Uniswap:
The strategy is dynamic, in that you provide liquidity once and then people buy and sell assets through the blockchain, using your capital.
The assets that you own may change during the liquidity provision - this is what is dubbed as "impermanent loss" and is explained by the chart above.
The instruments that can be provided can be anything that is minted on Ethereum. (e.g. two USD-backed stablecoins).
The P&L varies according to how much volume there is on Uniswap. The curve from the image above is shifted up by
0.30% * your liquidity / total liquidity in the pool on every trade.