Dropping decimals for deltas is a fucking noob move. NOBODY in professional or amateur options trading does that or discusses delta like that and no options prices are ever listed with delta with no decimals. And I stand by what I have said, gamma DOES become infinite even though in theory with static IV, it does drop once the option becomes ITM and eventually approaches zero when the delta is 1 but in reality IV changes and constantly adjusts so when volatility explodes, IV explodes with it and that's why a particular option never becomes ITM enough for gamma to become zero; it will ALWAYS have some positive value exacerbating delta so in a way, gamma really becomes infinite. I stated this very clearly in the original thread where I first made this observation and illustrated it with the Oct. 19, 1987 Black Monday phenomenon:
You two POS can't understand it and refuse to understand it because you two were too busy protecting your pathetic ego so you two can continue to troll here.
If gamma all becomes zero there should be no reason why people would not able to buy back their options when it was DITM even paying several times over the intrinsic value since if gamma is zero when delta is 1 then that means there is no more extrinsic value between the options price and the underlying; intrinsic value is all that's left. But that's NOT what happened on that Black Monday, Oct. 19, 1987. Put sellers who were losing were offering to pay several hundred times over the intrinsic value in order to close their positions and their orders were refused. And the MM's who refused their orders all cited "risk" as the excuse and that the price was fast moving. Given that what they were saying is legit, this proves my point that gamma can become infinite when pushed by IV that's fast ballooning and increasing in real-life trading which is entirely different from what's statically in theory that it is zero when delta is 1.
"Options markets losers have complained that prices became unreasonably high during the day on Black Monday, that professional options traders at the Chicago Board Options Exchange were gouging individual investors.
Exchange officials dispute that. With the stock market in free-fall, the risk of buying was too great and traders had to demand steep premiums to protect themselves from disaster. "It's like walking into a burning house and trying to buy fire insurance. Of course it costs a lot," said a CBOE spokesman."
https://www.washingtonpost.com/arch...ped-out/090c57f7-fc75-4f02-9d22-585cf53c8548/
Premiums, steep premiums!! If gamma is 0, delta is 1, WHERE did these premiums and steep premiums come from??!! Everything should be intrinsic value; there should've been no premiums. If you look at an DITM option right now with delta of 1, gamma of 0 from any option table, its price is exactly the intrinsic value but that's not how it happened that day. If it could happen back then, it could happen today and it does happen today, just on a muted level because of circuit breakers.
If the underlying of SPX on that day was 250 let's say, and the strike was $350 let's say, with a gamma of 0, delta of 1, the option price should've been (300-250) just $150, and yet the guy in the article was offering to buy back his options at $5,300 to get out, a premium of (5300 -50) = $4650!! If the intrinsic value determined by delta of 1 was only $150, then the entire extrinsic value of (4650 - 150) = 4500 would be due to gamma. It didn't reach infinity only because the market closed at 4:00 pm. If it hadn't, I am sure it would've gone further due to the exploding IV that was determined by whom?? Yes, our best friend, the dealers who cited "risk" and using the wonderful analogy of buying fire insurance for a burning house. Sure that insurance would cost a lot, but how much is a lot?? Infinity??!!
Anyway I don't expect you two bozos to understand or ever wanted to understand it as like I said, you just wanted to troll with your ego (cuz that's the only thing that you have left). This is really for me and for everyone else on ET who's interested in options and wanted to learn more about it instead of or at least besides trolling. And it's really off-topic to this thread here but I can't believe you two shitheads would drag a topic from another thread to this one just to troll because you are just that pathetic.
