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25970

Straddle on Last day

With weekly (wed and Friday expiry) options becoming more liquid I am trying to back test a simple strategy of doing in to Long straddles on every wed and
mahesh_joglekar
May 17
#25970
 
25969

Re: Gama scalping

let me clarify 1) Starting position is Long Straddle 2) Underlying to be traded only after it moves after the step 1 is established and not at same time and
mahesh_joglekar
May 17
#25969
 
25968

Re: Gama scalping

No. That is not exactly what I said. It should be a method everyone uses or should be aware of as a risk management tool. You may not ever wish to trade delta
Michael
May 17
#25968
 
25967

Re: Gama scalping

I totally agree Michael its for market makers. On Wednesday, May 17, 2017 3:50 PM, "Michael mcatolico@... [OptionClub]"
Ethan bond
May 17
#25967
 
25966

Re: Gama scalping

Adding stock doesn't add risk to the trade, it locks in profit and thereby reduces risk. A long atm straddle is the classic way to teach gamma scalping. It
Michael
May 17
#25966
 
25965

Re: Gama scalping

Perhaps but the original post said the opening trade was a straddle. Going long or short stock just adds additional risk without properly hedging the straddle.
Jim Goodbody
May 17
#25965
 
25964

Re: Gama scalping

Actually gamma scalping is what most pros trade. At least those pros that are market makers. Because they are recipients of bid/ask differential, it's
Michael
May 17
#25964
 
25963

Re: Gama scalping

Mahesh: Gamma scalping is a losing proposition in most trading situations because of theta decay. Its not suggested by the masters of the field for retail
ethanbond911
May 17
#25963
 
25962

Gama scalping

Does anybody trade a strategy called "Gama scalping" Which is Long Option straddle (ATM) and as the underlying moves Buy / sell underlying
mahesh_joglekar
May 17
#25962
 
25961

Re: Risk Management

On Fri, Apr 7, 2017 at 00:05 ethanbond911@... [OptionClub]
Gerald Knodel
Apr 22
#25961
 
25960

Re: Risk Management

my msg didnt post y'day for some reason. The profit on selling the three contracts in your example would be 1+2.33+4.1=7.43. On the strategy, is there a
nalini_agarwal
Apr 22
#25960
 
25959

Re: Risk Management

Ethan, With the first increase, you get 1 by selling one contract. And for the second increase, you will get 2.33, not 1.33. And for the third, you get 4.1.
Nalini Deepak Rastogi
Apr 22
#25959
 
25958

Risk Management

Rdmacarthur: Thank you math is never been my strong suite I appreciate the help. I thought about managing the trade with fibs. Have a profitable month :) Ethan
ethanbond911
Apr 7
#25958
 
25957

Re: Risk Management

Ethan, I'm getting a different answer. Buy 3 @ $3.00 = 900 cost. Sell 1 @ 4.00 500 cost basis sell 1 @ 5.30 30 credit sell 1 @ 7.40 770 profit
rdmacarthur
Apr 6
#25957
 
25956

Re: Risk Management

Mary Chandler: Thanks for chiming in. The system is designed to buy Delta .70, so I am just following the system and trying to come up with a better risk to
ethanbond911
Apr 5
#25956
 
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