Sears Holdings

harrybachs · Nov 10, 2006

Since Sears is coming out with earnings next week before the expirations...it may be a good shot with one day left to buy a straddle.

Since there will be very little time value, the options will have huge gamma and pick up all intrinsic value should it move.

Any thoughts?

Harry

Linda Options · Nov 10, 2006

Harry, buying a straddle or strangle with one day left is a double edged sword. You can lose everything or make a killing. I think that if you know how to gamma scalp you can greatly increase your odds of success.

harrybachs · Nov 10, 2006

What do you mean by Gamma scalping?

harrybachs · Nov 10, 2006

Sounds like something from the old west times.

Bitstream · Nov 10, 2006

buy back months and keep 'em 'till evenin' before report...infact am thinkin of doin' it.

IV_Trader · Nov 10, 2006

Quote from Linda Options:

Harry
Gamma scalping is the method of using an option position's gamma to squeeze money out of a trade. It is not hard to do but difficult to explain. THe best source of information with a step-by-step recipe that I have found (and I own 50+ option books) is found online at RANDOMwalkTRADING.com

They are exspensive but worth every penny - especially compared to the price of a seminar, and they are much better than a seminar.

Hope this helps.

there is no step-by-step recipe for gamma scalping. Show me your first scalping move/action and I will show you future scenario where you might regret this move.

harrybachs · Nov 11, 2006

thanks for the book suggestion. I will look at their website and check it out.

Has anyone else read these?

Harry

timbo · Nov 11, 2006

You might turn into hairy knuckles if you follow Linda's advise.

Bitstream · Nov 11, 2006

Quote from IV_Trader:

there is no step-by-step recipe for gamma scalping. Show me your first scalping move/action and I will show you future scenario where you might regret this move.

tough cookie. got trashed tryin' it on aapl. was more of an hedgin' attempt but still turned sour.

IV_Trader · Nov 11, 2006

Quote from Bitstream:

tough cookie. got trashed tryin' it on aapl. was more of an hedgin' attempt but still turned sour.

I hear you , Bit. Low HV + collapsing vols = disaster .