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You're right about delta being associated with stocks and options, as stocks have a delta of 1. True, gamma, vega, theta & rho are unique to options. However, one atm option leg is about .5 delta. Therefore, 1 long put option woud be offset with only 50 long shares of stock. In essence...

What other way can I put on a spread that is a slight credit. If the trade goes further otm or doesn't move, then I get a few bucks for my troubles. However, if it goes toward ITM, then I get the jackpot (as long as I don't allow it to go too far ITM - too far ITM & I lose big)...

I understand that many professional option traders prefer the Broken Wing Butterfly (BWB) over the standard butterfly. I'm planning on experimenting with a strategy that would be an earnings play setup... In essense, if I were to establish a BWB call and a BWB put, both OTM, about 3 weeks...

Excellent repsonse dmo, I appreciate you thorough response. It's right on target with my dilemma. Although the benefits of gamma and delta do cost (i.e. premiums), do you think it's worth paying the premium for two option legs in a long straddle, or is it better to have a long straddle...

My aim was Not to compare a synthethic call with a natural call, as I recognize the greeks are the same. What I was trying to do was compare an option leg with a stock position(obviously my attempt was poor). For example, is it better to have a long put & a long call or a long stock and a...

For gamma scalping, is it better to enter a long straddle or a synthetic straddle? Although the synthetic saves on the theta decay, as well as an adverse impact to implied volatility, it does give up the positive effect of delta & gamma because as the strike moves farther OTM, the delta &...

thanks ES...

Some firms have real low commission rates, but you only get 80% - 90% of the profits...

A potential problem with this strategy is the fact that there's a strong possibility of being pinned at expiration, or having only a short leg exercised while ITM, plus having the long wings expire OTM... What can you say... No Free Lunch...

VTrader & Assent

I would trade stocks with a prop firm; however, comparing the 4:1 leverage for overnight stocks (i.e. the SPY) with the leverage from the ES with futures, it takes less futures capital to make the equivalent with 4:1 on overnight with stocks. If I can get a prop firm to give 20:1 with...

The reason why I would probably go with IB over Mirus, Amp or any other broker that offers $500 intraday margin is because I'm a swing trader. Therefore, I must hold my positions overnight. The overnight margin requirements are established by the exchanges. So whether I'm with IB or Mirus...

I would trade the futures through Interactive Brokers, as they have pretty low rates for a retail broker and they are financially sound...

I'm at a crossroad... I'm considering the pros & cons of going with a Prop firm or trading thru the Futures market, as I am a Swing Trader. The problem is that the prop firms I've talked with only offer about 4:1 leverage overnight, although I could easily get 50:1 intraday. If I need to...

I'm being offered $0.005 per share initially, $0.01 round turn, plus 85% payout. I am told that after a few months it would be lowered to $0.004 or $0.003 per share, with a payout slightly higher than 85%. Is this reasonable for a new prop firm trader????

Does anyone have a lead on any software "grey box" developer for automation of gamma scalp trades? thanks, Walt

I'm looking for a "grey box" application that allows me to set the parameters for buying and selling stock or futures in accordance with changes in the delta of the derivative (options). In other words, I would like to set the direction (long or short), the limit or stop price of the stock, and...

Then again... K.I.S.S. - simply enter a short straddle & cover when you achieve a 10% return on margin or when the the premium to cover your loosing position equals the sum total of premiums received. Just do this with a European Style Index Option...

In consideration of a reverse gamma play, I would enter a front month short straddle (or no more than 6 weeks to expiration). As the market moves against me, at the point of breakeven relative to the premium on received on the leg that's now at a loss, I would short/long the underlying to be...

Good point, whether one implements a gamma scalp or a reverse gamma scalp (which in essence is what's being described in this thread), it's all about being aligned to IV. If you think IV will drop after the trade, then reverse gamma scalp. Otherwise, a gamm scalp is best if IV is expected...