Basic Points

• Color is a third-order Greek which measures changes in gamma in relation to changes in time. 
• Color’s and zomma’s dynamics are nearly identical: implied volatility (IV) behaves proportionate to time—to the extent that IV is affectionately nicknamed as synthetic time—and it follows that the dynamics are similar when comparing changes in gamma either to changes in IV or time.
• Like zomma, color’s effects are the strongest when ATM, but they are still very strong around 5 or 95 delta. Also, the impact of color increases with less time and less IV, since “[with greater time remaining] the option’s gamma is less sensitive to the passage of time” (Natenberg, 2015, p. 152). 

Expert: Dynamics

As a wrinkle in color’s dynamic, based on the idiosyncratic nature of gamma out there at the tails, the normal effects of gamma are inverted. This means an increase in time or IV causes gamma to rise, and vice versa. As a general rule, however, gamma has the opposite dynamic. 

Also, color is about zero near 15 and 85 delta, meaning that “the gamma values of such options will be relatively insensitive to the passage of time” (p. 152). As an explanation for that, this is about where gamma inflects regarding whether IV/time will increase or decrease its value. And then as a direct analog, all of these dynamics are roughly identical for zomma, such as how it is the largest ATM, and very strong near 5 and 95 delta. Likewise, zomma will increase as time or IV decreases.