Both Jim and Della gave up their most prized possession for one another; this symbolizes the way that lovers give all to one another.
Of course, the specific objects can be seen as having symbolic meaning; he gives away his watch (all his time); she gives away her hair (her beauty).
In "The Gift of the Magi" O' Henry uses symbolism in reference to the Three Magi (The 3 Wisemen). They come bearing gifts of gold, frankincense and myrrh to Baby Jesus in Bethlehem. The gold is a symbol of love, the frankincense and myrrh were used to burn and had a sweet aroma. They were also ingredients used in developing medicines. These gifts were not only practical, but precious.
Jim and Della gave gifts that were also the same. They were prized possessions but the gifts they bought were practical; combs for her hair and a chain for his watch. They bought these things to add to the importance of their possessions, but in the end the greatest gift they had was their love for each other.
The symbolism in "The Gift of the Magi" is based upon the gifts given by Jim and Della. Both Jim and Della gave up a possession the forfieted the importance of the gift they would receive from their spouse. The gifts showing the importance of giving everything of themselves. The key note in the story is that both Jim and Della do not focus on what they have lost, but instead are touched (as the reader is) by the gifts that they have received.
how "symbolism" apply on O.Henry short stories?