Going long gamma (for profit)

N

nooby_mcnoob

Some peeps on Twatter apparently trade gamma for profit using OTM options that are 1-2 weekly ATR out. I conceptually understand that they think theta decay will be slower than gamma increase when the options become ITM but is it really as simple as that? Anyone here trade gamma for profit?

It seems like a fancy phrase for "lotto ticket".
 
Wheezooo said:
Capturing gamma has absolutely nothing to do with OTM to ITM. It is capturing ANY movement.

Absolutely not a lotto ticket. Gamma is your friend, unless you are short it, then it's pure evil.
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Ah yes of course, that is true.
 
nooby_mcnoob said:
https://www.randomwalktrading.com/practical-gamma-scalping/

This site explained the ideas well.
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Ah yes, I remember posting about gamma scalping. Unless you've got a huge account there's no money in it. Good luck having enough cash after margin from buying/selling a bunch of straddles to long/short the underlying and continue to hedge all the way through your trade. The "youtube pros" gamma scalp wrong and make it seem as simple as "oh we've got some calls and short some stock, time to hedge!" In reality, its far more complicated.

If you do have a giant account (like a market maker) gamma scalping would be a fun exercise. VolCube's MM simulation really teaches you how to scalp gamma well.
 
On a 1-10,how evil are long Calenders,Butterfiles,etc :)



Wheezooo said:
Capturing gamma has absolutely nothing to do with OTM to ITM. It is capturing ANY movement.

Absolutely not a lotto ticket. Gamma is your friend, unless you are short it, then it's pure evil.
More...
 
taowave said:
On a 1-10,how evil are long Calenders,Butterfiles,etc :)
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Yeah, laugh all you want. You obviously never woke up in the middle of the night drenched in sweat, from being chased in your dream by 'the negative gamma monster,' which looked like gossamer from bugs bunny, except with sharp pointy teeth shaped like deltas.
-true story!
 
taowave said:
Trust me.I have lived the short gamma nightmare and barely lived to tell...
Have you met my friend Mr Wings??
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The hero of our story, and proud to say, my best friend.

galio-birdio.jpg
 
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