Learn Gamma Scalping to Manage Your Options Trading Strategies #o…



Scalping Gamma Video Lesson – Options Trading Tutorial – How to trade options Learn Gamma Scalping to Manage your options …

47 thoughts on “Learn Gamma Scalping to Manage Your Options Trading Strategies #o…”

  1. Thank You all for the great comments. Learning to Manage your options position is so IMPORTANT! If you have any additional questions about Scalping Gamma, or anything… leave a comment and I'll be sure to reply to each one of you.. thanks again Jonathan Rose

  2. For the past 4 years I’ve primarily been selling options and have avoided long options. I can see now how gamma scalping clearly allows the professional trader to protect his position from theta decay with active management while waiting for the long or short leg to reign in some profit potential. I’ll be watching more videos. Thanks, Jonathan!

  3. How can I contact you , i need to learn and understand this deeply. Any contact via Instagram or Twitter ?

  4. I never understood why they complicated by calling it gamma scalping. All you are doing is flattening your deltas every step of the way

  5. Great video, But to this day I still don't understand why they call it gambling scalping. It seems more like a Delta scalping to me

  6. I have never found the price of an option contract with a period longer than one month to equal $60 for a call.

  7. To the audience: You could do the same thing just buying an option and hedging the delta. Then adjust the delta each time there is a significant price move in the stock. HOWEVER, this is just the other side of the coin of delta hedging short positions. Everything has a shortcoming.

    For this strategy, the issue is that you'll need volatility in the stock to exceed the IV in the options you bought over the term that you are in the trade. Otherwise, theta will eat away the impact of gamma and delta. And if you are selling options, you need volatility of the stock to remain lower than the IV of the options in order to assure a significant profit.

  8. The real problem is what if the price doesn't move in any direction. The option contracts are basically forming a strangle strategy, which is a risk of death valley problem.

  9. are market makers doing this on a larger scale to hedge the overall market if heavy on either side call/put?

  10. Why did you buy the put then. Would be nice to show how a trade like this could go wrong. What if the stocks kept going down?

  11. By god ! wow! what a clear cut explanation. I went crazy reading a university paper on the same subject.
    Thanks a lot .

  12. This makes you a better trader…I wonder though, instead of selling the underlying,could we use an option instead?

  13. HI Jonathan, Excellent Video sir. I have one question. When stock moves up and down , delta also moves along with it. The method you mentioned closely resembled to delta hedging. Is there any particular difference between delta hedging and gamma scalping. Thanks for your help.

  14. Hi Jonathan – Firstly, this is a great concrete example of gamma scalping. I do think it could be improved by explaining a few of the variables so it can be applied to other examples outside of the one you gave. Notably, explaining where the number 30 comes from. I'm not sure if this is meant for people that already understand the Greeks, notably delta (which I assume was .3 at each level of the 30 share trade). In addition, I think it would be valuable to explain where this strategy could fail (IE: when realized volatility is less than implied volatility).

    I also had a question about the initial trade, in my experience, most market makers that implement this strategy start the trade delta neutral, immediately purchasing the requisite amount of hares to hedge the position. In the example with KEM, the purchase of the put wouldn't completely offset the call's delta. That being said, is this trade also expecting to profit from a directional move to the upside?

  15. So why not just take the profit on the option position? Is the thinking that the option has decayed to much for profit? In the example you bought the 24 strike for $.60, and the stock went up a $25 a couple days later, I would think the 24 strike option would be more valuable than the $.60 you paid for it. Of course you're still underwater because you bought the 21 put strike.

  16. I feel dumb now! I've been trading options for 5 years now and I've heard about gamma scalping but never really looked into it. I can't believe I never learned this. I think it's because I mostly sell the options but sense I buy premium for hedges I guess I could add this to my strategies to capture that premium back.

  17. Is there a way to do this or something similar in reverse, if you are selling an ATM straddle? I love the massive time decay on TSLA right now. The $600 straddle out just 5 trading days is $60…that's $10+ or $1,000 per day on Theta with a 1 contract each side straddle. Of course your risk is that it blows up in the next week to one side or the other. It would be great if you could somehow keep it delta neutral and just pocket the $1,000 each day. Not even sure there is a strategy that would be the opposite of scalping like you show in this video for a long straddle. Thanks!

  18. This is genius!! Correct me if I'm wrong, but you are buying a call to make profit going up and buying a put to make profit incase it goes south. BUT! you are shorting the short along the way to make back your max risks for each contract (call and put). Now you are in these contracts without risks. And still take profit on whichever contract worked out.

  19. So when the stock keeps rising til expiration, you just keep selling to cover your position entirely? And you only buy back when the stock falls or do you not buy it back if it keeps tanking til expiration?

  20. Excellent explanation!
    But why a strangle not a straddle? Lower premium?
    And why scalp 30 delta at a time?
    And how far to scalp? Up to 90 delta (3 x 30, assuming that's less than the delta of the ITM leg)? Or slow down scalping if you think you can't close out the shorts profitably by expiration?

    Anyway, this clear explanation got me thinking. Thanks!

  21. When does this strategy or method lose, worse case scenario. Lose $110 etc. what would the stock have to do? Stay within the strikes? Thanks? I’m new to options. All this makes my head hurt. 😂😂😂

  22. Man for every 1 of these, there are a 1,000 ridiculous thumbnail nonsense robinhood videos on youtube. This is great and I'm excited to understand this better. Will do a lot of research until I do! Looks like I need to implement this asap.

  23. So buying back how ever many shares you sold protects you from owing the call seller if the option becomes out of the money at the end of the trade? Am I understanding this right?

    Edit grammar

  24. In simple words the strategy you used here was that you bought puts & calls on Kem & executed your options which ever side the market turned towards?

  25. Thanks for this, I've never tried scalping gamma. This is an example of everything going smoothly, correct? If it hovers between 21/24, then you're at max loss, what else can you do, any gamma or mitigating plays?

  26. Are you really long 100 shares on that .60 call though, it would have to be same day expiration to get a full 1.00 Delta most likely on such a cheap contract. At that point theta would be eating you.

    Good ideal of gamma scalping though, thanks.

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